my email succeeded in doing that. thank you very much. [applause] i will be happy to discuss this. corrects i would like to ask a question. >> do you to explain what happened? >> i would rather not. >> as i recall, she sent out a tweet or a facebook post memorializing someone -- >> a leader that died. she expressed some regret over his death. she liked him a lot. >> and she was fired. >> that was reported.

>> are you asking how i feel about that? that is another example i brought into this. i was not part of that decision. inappropriate to get into somebody's employment because you never knows what goes into that. it is an even more vivid example of what fassihi talked about. with social media, there is a false intimacy we feel we have, that we are communicating with the people on our facebook page or in our twitter feed. in the same way you talk to people in a private conversation differently than a public forum, reporters need to understand that kind of private conversation does not exist in social media.

there are certainly balance beyond which a reporter compromises his or her ability to be seen as an independent observer. , is gets to a larger issue like to think most journalists are intelligent human beings and we have thoughts and opinions and we are processing information. at what point does that come into our coverage? if you remember what fassihi said, there were conventions about the wall street journal that did not allow her to express her view of what was going on in baghdad. when she expressed it, that had more impact than any story she had written. ofre has to be some way channeling those kinds of observations and analysis in a way that is congruent with

institutions that enable people to get a feel for what is going on. i think you're supposed to go up there. or you can pass around the microphone. >> i have a question about the difference between social media and your role as a reporter. what would you say is the appropriate content of the social media message as opposed to what you are reporting? what other things social media allows you to do that are more difficult in a conventional journalism framework? obviously there is an immediacy to it that is hard to duplicate. if you are reporter being sent

to a breaking story, twitter is a powerful way, especially enabling people to find and. side elements, a downside, if you are a publisher that thatloyer, all traffic is going to twitter. it is probably not going to your website and taking way some of the time they might have been using to build sources. the kind of lying is are you saying something that is going to compromise your ability to to come across, as a thoughtful and independent observer of what you're covering. i am sorry if that sounds squishy but it is hard to come up with a codified set of rules

about what you can and can't do. that is why i said in my remarks, the self editor has to engage. myit going to compromise ability to be an independent observer? if that is the case, you have to think through it. -- i'mn't this put more with the southern leadership christian conference. class of 1972. does this put more pressure on you as a professor and edgar because back in my day, in television, we wanted to be stars. and thehe ethics teachings of journalism that gave us a balance. comments werer on the record. you had to be cognizant of that. on what you back

do? >> it absolutely does. schools, editors, station managers as well. we have been incorporating more social media classes in the curriculum teaching students the basics about how to use twitter and facebook and some of the pitfalls you run into. for example, a big issue with informationalidate you are reading in social media. in a is tremendous value lot of what gets reported on social media, especially in breaking stories. learning how to authenticate that information, understand who it is coming from and when you should be using it is a difficult question. we take them through case studies of times when it has been used effectively.

class of 2009, i am now a reporter with cbs atlanta. i am curious about your opinion on a couple of instances that have made national news. cbs anchor in a wisconsin, overweight, a man sent her a letter telling her she was overweight and a bad role model. she responded on air admitting she was overweight. blah, blah, blah. a friend of mine, i worked with her in new york, a meteorologist, a viewer had posted a comment on her to as theage sainying black lady that does the news. why can she wear a wagig?

she responded to him saying, something i thought was appropriate. she said i am proud of my ancestry, which includes my hair. traditionally does not grow downward. she was trying to explain to him. she was fired. the anchor was not. she responded on tv. rhonda lee was violated. -- was fired for violating terms. >> something she said on air? >> on social media. i was curious about your thoughts. first one, i did see that video, the wisconsin woman that was defending her weight. i do not generally discuss women's weight in public. i'm trying to figure out how to say this with c-span cameras on.

-- reaind of a trick we eacly and an appropriate thing to do on tv. all of us of -- as human beings take those kinds of barbs from time to time. havee second incident, i not read that so i do not know exactly what the woman said on face but but it does not sound like somebody simply responding to somebody saying this is my hair and this is my heritage and i am proud of it. but again, i do not want to have too many more discussions about should summon the have been fired because it can be hard to know. that's one i do not understand why that would have triggered that outcome.

i am a structural engineer in this area. i am a builder as well. if somebody told you the american people were never told why we failed in a rock, what do you tell him? >> why we failed with the outcome of the war or the reasons why we went into iraq? >> both. and think americans american journalists have done some introspection. you have seen a lot of it this week with the 10th anniversary of the war, the failure of the media and of other institutions to discern the truth about the weapons of mass destruction, which was the primary rationale resident bush gave for invading

iraq. prettylike that has been well opened up. i will say this, i think the iraq war is so faded from the american consciousness. there were a series of car bombings that killed dozens of people and you had to look hard to find that story. it says something about being interested in news beyond our borders. we can only handle a crisis of our time. there is like one country and that is where most of the attention goes. the truee media tell story about why we failed in iraq? you did not answer my question. >> he did not phrase it that way. do not want to get into a discussion about the pros

and cons of the iraq war. i think the inability of the press to discern what was really going on in iraq before the war is something that the press has come to terms with. it took a while. the new york times did a story about it and the washington post and other organizations. i will say i think american media have lost interest in iraq. they have not done the level of reporting, especially since our troops pulled out. >> do you want me to tell you why they lost interest? >> if you can keep it short. alwaysuse the truth comes on top soon or later. cominge truth starts through the grapevines, everybody is very upset. >> thank you very much. >> i work at cnn.

people taking their followers when they leave, ouar3e physicians doing anything to combat that? organizations doing anything to combat that? >> there are some that attach the name of the news organization to the twitter handle. i can't remember which one. i would be curious. i know you are doing social media. curious what the policies are out there in newsrooms in terms of if you leave your news organization, do you have to turn over your twitter handle? how does that work? if you saidgood who you were and you could come up. the old trick of turning the answer some -- over to

somebody. >> i am the social media manager at cox. i do not know, i can't comment for other companies but cox is decentralized. at corporate, we are advisories. they have their own policy and they have decided journalists as the have it branded organization and the beach. -- beat. up because ik it wanted to tweak to earlier. earlier. you >> do they turn it over to the company? >> it depends. in the case of tv, it also depends on the contract that specific person negotiated.

it is on everybody's mind that there is not a blanket policy. >> that is interesting. do you have a question? >> i do. [laughter] we talked a lot today about the middle east and the curriculum at columbia, i have a question social media and the arab spring. one of the things he has been actinged for is often as a central hub to curate tweets and he will sometimes retweet unconfirmed facts but he will label them as such. i am wondering if that is something you guys teach, knowing that in the u.s., if you retweet something about somebody that can suit you,

maybe that is not a good practice. -- does everybody know who andy is? he is a social media guru at n pr. during the arab spring, and beyond that, he developed a significant following by taking a lot of twitter feeds, especially from egypt, the other countries that were exploding, and retweeting certain tweets he thought had a level of reliability. from time to time, he would retweet saying i do not know if this true. you see that in the new york times. they have a blog called the led

and they do a perfect job on stories like the iran uprising or other breaking stories. sometimes you're confronted with something, a video that is getting hundreds of thousands of views, it purports to be from one side or the other, it shows some horrible things. something you think your readers should see. do you post it ? do you say this is from a source ,e have used before, or the old everybody is talking about it so we are going to provide a link. is filtering through the things that are going to be damaging to the institution or to the person you're covering. if the consequences of that thing being untrue are significant, again, the self

editor has to engage. at a certain point, if there is a video from syria that hundreds of thousands of people have seen, as a news organization, you have an obligation to say here is this video, this is what we know. we're going to keep on this to try to eat alleyway the authenticity of it. a lot of times you do not know if it was shot today, two years ago, something that had been worked on in photoshop. there is a lot that can be done with digital video that gives one pause. like the wall street journal, when we would get the two non-a story. get beat on a story. even if you could not confirm it, you would say the stock of x company is down a stone the

reports that came in some alternate publication we are not going to mention -- down two thatnt based on a report came in some alternate publication we are going to and -- not going to mention. if you'd like to hang around and answer any other questions. [laughter] >> i am an independent journalist, but a background in tv and print. without making it complicated, how did social media become a part of the journalism pantheon? how did it and how is it accepted? expedient the means of information are, they were always vetted. in radio, and today, a tweet is 15 words.

.hat seems to be a violation how much of it is a jerk -- how much of it is driven by advertising because it does compromise, when you mentioned the stair -- the story, frequently publications, media outlets, demand you to be part of their facebook pages. it is twofold. intou can break this several parts. social media is a important distribution platform. a lot of what i read during the that my friends or people i follow on twitter are saying, this is interesting. for a number of people, twitter has become the home page in a way that the new york times is not. that might be hard to imagine but during the 2012 electn, if

you are following the best knewical journalist, you everything that was going on. you knew it in real-time. you knew what they were reading. you knew what they were talking about. think of the value of that. journalistically, that is a valuable thing. >> i will stop you there. you used to have to put things in the mail or call somebody. that is not part of the journalistic realm. there is a thin line of saying what is verbatim and the other one of saying, i am following so-and-so because they are a good reporter. those are different things. >> they are.

at the tampa tribune or even the journal, you know, i just assumed if the herald's circulation was 480,000, i assumed 480 thousand people read my story. even if those on page nine -d. it was a small fraction of that. i did not feel any personal responsibility for ensuring people read my story, except for arranging an editor to get it on the local front. 'swould argue the journalist do have a responsibility, often one is encouraged by employers to get their stories out there. part of the way you do that -- and advertising is in that because the more page views, the more advertising you have. one more.

to see thepeople printed word, the articles, the twitter is 15 words. they are not vetted. that is the crux of it. , twitterk, you know can be an effective way for journalists to find sources as well. . fassihi, she ms uses it in order to find out what is going on. thates not mean she runs in her story, but it gives you a starting point in a way that is one more tool in the toolbox. it is certainly not the only thing journalist should be doing. but it can be effective. >> thanks for coming.

christopher at cnn. i wanted to hear more on your thoughts around social media policies toward employees. i have spoken with a lot of colleagues. it seems like a lot of them are going with a blanket policy of, you can't express your opinion. to follow up on that, you mentioned a couple of new students. that generation in particular has gone a long time without any filter on their social media. opinions areheir out there already which could influence their careers. where is this going to go? >> the short answer is i don't know. can youer answer is, say the first part of your question? >> looking at the direction an

the large media companies have gone. you have no opinion. certainly for many years that was the way newspapers handled things, especially when most cities became a one newspaper city. it was the interest of that newspaper to make sure it did not mean one where the other because they were trying to get the largest audience. certainly understand where they are coming from and you can see in the case with the new startedes, once she saying some of the things she said, they had to bring her in. they have an institutional interest in being seen as a disinterested observer in the middle east. not so much as turns of advertising, they are not getting many ads from a banking cairo, but their ongoing credibility. i understand why they're doing it. i think what we're going to see

is the big institutions will continue to do that. that is why the washington post policy is so strong and stiff. in the meantime, there is a surge of very small news organizations and websites that don't feel they operate under the same strictures. journalist's are going to make up their minds in terms of how they want to do their career. something else you alluded to which was important, journalists need to realize they are in leaving a digital trail wherever they go. something i tell students as i when i worked up in baltimore in the early 1980s and i dare you to find them. you would have to go into the basement of the baltimore public library and goes through microfiche. if i want to find a correction

for a journalist today, it will take me two minutes. they can go back 7, 8, 10 years. i think the digital fingerprint we are leaving above and beyond the media can fight durations that can happen -- configurations that can happen, this trail is a lot of -- is something a lot of people are not conscious of. >> my name is jimmy. i am not in the industry. a big fan and aberrant reader. -- avid reader. this has to do with objectivity. and how you teach objectivity and the difference in the articles i read, i read an awful

lot. i see from an article to an editorial, sometimes that gets a little blurred and then you get to social media and it can get even more blurred. i am wondering how you teach that. atwhat we tried to do school and every organization i have worked at, it cannot frame going toty, i'm devote 50% of my story to one side and 50% to the other. you are really a stenographer at that point. au do have an obligation as journalist to use your analytical abilities and your knowledge of the beat to provide an informed view of it. i call it more independence than objectivity.

if you basically decided which side is right and which is basically close yourself off to the opinion that might inform it and that might go against your grain. know, it is very hard for a lot of young journalist to cover the anti-abortion movement. they feel so visceral this is right, it has been decided by the supreme court. session with my students to help them understand there are reasons why people feel the way they do. if you close your mind off to that and if you categorize them as all of one ilk, you're not doing your job. whether you agree or not, that is beside the point.

that is a learning process and something i think the good news organizations infiltrate in the way they do journalism. >> i want to thank you for your talk. i am a former san francisco chronicle editor, recently moved to atlanta. i question is about the degree to which her colleagues at columbia and that the journal talk about how different platforms are appropriate for it during -- different functions. i noticed facebook seems more appropriate for pundits and columnists and that twitter is great for reporters. i wonder if you see a day coming when just the differences in the way the technology works will help organizations come up with guidelines. >> i guess i had not thought

about it that way. with facebook, there tends to ,e a more defined audience like old high school girlfriend. cousins you are embarrassed they have the same last name as you. twitter, your audience is instant. if you are interesting or provocative, you can easily , hundreds of thousands of followers, which is impossible on facebook. there is some interesting research about how readers use twitter and facebook. it is a different sense of discovery. twitter tends to be more topic- based. you might have a twitter feed for people that are covering the atlanta braves or politics in tennessee or something. facebook it tends to be more of

a social environment. i'm not sure news organizations have thought that through. one. make it good. >> no pressure. >> you should see how i feel. >> thank you for being here. i work for cnn. like a lot of people that work for a larger news organization, our experience in social media is not within our own personal account, it is managing an account for the organization. one of the challenges i find in is having a voice but also staying within the constraint of the brand. you had mentioned earlier how people are trying to become brash and that sort of thing and how they use social media in order to wring more people to

their website. do you think , or what isine that line between having your own voice as well as staying within these constraints in a personal or company account? issue of company account is interesting because i would people are anxious to get more followers if they see hascbs affiliate in iowa 30,000 followers. you have tothing take care of. how could this be true? what you need to do to triple your audience on twitter is a lot of stuff your boss might not be comfortable with. i think a lot of it is news organizations trying to figure out, what does their brand --

what do we want to be known as on facebook or twitter? how does that overlap, or how does that differ from our institutional brand? -- ild assume a big issue am not sure. seems like you may have to have a different set of rules of how you portray yourself on one of these platforms and with the general public. >> thank you. >> that ends our program. the you a twitter account? >> i do. it is really boring. [laughter] >> how many followers? >> 1600. something like that. >> thank you for coming.

[captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> happening all day today, a summit looking at the global economy. coming up, remarks from alan krueger, and chair of the white house council of economic advisers. starts in just a couple of moments and we will have it live. president obama held a news conference today. he answered questions on syria, the boston marathon bombings, and relations with congress.

you can see it tonight at it :00 eastern. and then at night, clarence tyrus thomas0, spoke with students. how his views have changed over the course of his life. here is a look. >> i never called myself conservative. that was another put down in the 1980's when they started naming us black conservatives to show we were like some vile thing. but we did not call ourselves anything. we were people trying to think about very difficult things and offer a point of view. suddenly there was a prescribed point of view. i found that fascinating, if people were told they could only go to one neighborhood, that is wrong. keep -- to is ok to tell people you have to think

certain things. that is bizarre. , i was never politically involved. i do not like politics. things.about i think about philosophies or ideology or things that happen in society. i do not like politics. --lso don't like and i certainly was not republican when i came to d.c. vote for ronald reagan. i was an independent. ivoted for in college because voted for humphrey in 1968. and mcgovern in 1972. i thought they were too service.

-- conservative. it was trying to think things through. i was more of a libertarian. i was trying to figure things out. people were telling me, you are black. we already have the views you are supposed to have. you're not supposed to read ayn rand. that is bizarre. why do we go to school? give us a list. we could read what am i supposed think today. his remarks in their entirety tonight on c- span starting at 9:00 eastern. about the summit hosted by bloomberg in washington, looking at the global economy and ted, we will have remarks from alan krueger, the chair of the white house council of economic advisers that will start in just a couple of minutes.

while we wait for comments i alan krueger, we aired the early session of this on c-span2 today and one of the speakers was the outgoing fcc chair who spoke about expanding access to

broadband. >> is nice to me here. it is tougher to talk about the deficit and debt than it was years ago when i was covering president reagan. i asked him if he worried about the size of the debt and he said i figure it is big enough to take care of itself. we do not have that luxury today. when i came to washington, we had watergate. and then a member of your institution, a powerful chairman of the house, he was running

round, had a stripper named fanny fox, those are scandals. they cheatcandal is, ts.their excel shee i prefer the other. but let's start with that controversy today. it is the premise of the great many that we all, that people accepted four or five years ago. let me start with you. i think the debt and deficit issues are serious, particularly over the long term. as we have done our simulations , we showed the recent actions by the administration have brought the deficit down.

but in 2016 it begins to increase. we have a huge wave of immigrants and changes occurring where in today's society, we have about 8000 people turning 65. between now and 2029, there will be 10,000 people. those demographics are going to hit to the medicare and social security programs and it is going to cost the deficits to increase in the future. we have a huge long-term problem. >> let me stay on this for a sec and. no question it is a demographic problem. staying with the spreadsheet controversy, are we , theerating where the debt injury it will do to the economy, i guess i am asking is paul krugman reich? >> first of all, i agree with g

ene, because of demographic shifts, you have to get a long- undereficit and debt control. otherwise as the economy improves, you will have a squeezing out and that will put the brakes on the economy. the problem has been people applied that analysis to the here and now. they said we have to act today to cut into near-term deficits, even when the economy is slow. the congressional budget office projects three quarters of the due to be a014 is the economy is slow. you have lower demand. the last thing you want to do is pull back quickly and deeply. things like the sequester.

to the extent people saw that study and they said we need to cut back in the current years, it is a mistake. it puts a drag on near-term growth. at the same time, we can take action today but kicks in and the long-term to address the out here deficit and debt, which we should do because you will have the squeezing out effect. it has always been a timing issue but that study was misused by many of my republican colleagues to argue for a so- called cut and grow idea. is not the way to move forward. >> we're going to talk about the long-term chronic debt and what we should do but short-term, should there be a stimulus? should we be spending more money to get the economy in

better shape? >> one version of the stimulus would be to get rid of the theester, which you saw house blink on the faa when they were faced with having to go to the airport and stand in a long line. >> is unconstitutional to have to wait five hours. >> i voted no on that. .> you cannot fly to maryland you have to take a car. >> you need a helicopter. to come back to your original question, i do not think this vitalcauses cutting government service. it was used for that purpose. nowink in the short term, we have to focus on the health and state of the economy,

getting growth stronger, and adding jobs growing faster. i think that means what we need to do is look toward investments that can be done in the short term on infrastructure and other places that would put people back to work, more juice into the economy. i think you could do that in the context of a long-term plan. the out here start 10 years away. start 10 years away. simpson and, when bowls were first meeting trying to put a plan together, the to gdpion was that debt was going to go over 100% in 2020 three.

now we are looking at it around 73% -- 2023. it aroundlooking at 73%. it is a flat line. after that we have the challenge of the retirement of the baby boomers. structuring i medicare to reduce the overall cost of healthcare in society and to produce results of lower- cost. that is what is going to make a big difference over the long run, not cutting head start, faa customs, and the severe cuts in the defense. >> the president did offer entitlement cuts in his budget a few weeks ago. is that the blueprint for the long-term deal you think is necessary? >> right now, the debt held by the public is over 72%.

in the last several decades it has been around the mid-40 pots. we are more in debt now than we have been historically. our margins are a little thinner as we face this demographic. you'd have toay, cut or increase revenue 44% and if you cut savings, 32%. stay at that ratio in the long-term. entitlement reform needs to be on the table. revenue needs to be on the table. there are a lot of smart cuts that could be made. >> how substances are the cuts the president proposed? does that get you where you want to go?

good starting point for a dialogue. i think there has to be a broader dialogue in the future. >> congressman, what was your take? >> a couple of issues. the budget also includes the thing john was talking about. number one, the first and symbol should be do no harm. the sequester is doing harm to the economy. the congressional budget office estimates that by the end of the year if the sequester remains in place we will have 750,000 fewer american jobs in the country. i have a big employer in my have imposed a hiring freeze. this is an invisible job killer because there are people that are not hiring because of it. do no harm. we have huge infrastructure issues in this country. american society of civil engineers has given us a rating of a d+.

nothing to be proud of. we have 15% unemployment. it is a no-brainer to help the more competitive against our major trading partners. we should do that right now. second, i believe we should take action now with respect to long-term. i think we need to build on the reforms we made in the affordable care act, bring down the overall cost of healthcare. moving away from a fee for service system. it is one of the worst designs. nobody has an incentive to state -- save money. they havengs today, all come out with ideas to help us do that by reducing overall cost in the health care system. not simply shifting those costs

onto the backs of seniors, which is what the voucher proposal would do. i welcome the move. the president will put on some of those ideas some of the other ideas are more controversial and i have some concerns with them. we can talk more about those. the overall thrust of the budget is invest now to boost the economy, do no harm, and take a balanced approach. if you try to do it all on the tax side or on the cutting site, you are going to make unsustainably and unacceptably deep cuts or high increases. >> let me ask you this, if you were to get a vote in the house , the president's entitlements could thatvenues, with the means testing, could

that when a majority in your caucus? ,> the president cost proposal especially the chained cpi pie ce, this troublesome. there is evidence that suggests senior spends a disproportionate amount of income on healthcare, which tends to rise faster. if it is supposed to be an accurate measure of increased costs, we should make sure it is accurate for all of the constituents. at least itation, is a live on the democratic side. on the republican side, they have rejected entirely the idea of one more penny of revenue for the purpose of reducing the deficit. they have said they will not accept one tax break loophole closure in order to reduce the deficit. that is what the grover norquist pledge says.

that is their position. they reject from the starting point the idea of a balanced approach and that has been the impediment to moving forward. it is going to be -- have to be part of the solution. >> why is it so hard, the chamber of commerce is for it. mayor bloomberg is for it. the governor, republican governors, why is it so hard? >> i think it is a combination of all that was just said. this anti-government, almost half knowledge he that exist among a good chunk of the members on the tea party side. and the inability to find financing mechanisms because it requires some resources and

revenue to be put into place. whether that is trying to find it from traditional sources, or by trying to find it by reducing loopholes, getting rid of the the oil and gas industry has, there is no capacity right now to get any revenue through the house. the president has suggested creating an infrastructure trust by creating more of a fee off of the extraction of oil and gas on public lands. there is no appetite for that in the house. whether you can find a way through by eating a bipartisan deal in the senate, as we saw in then seef 2012, and

if you could force a vote, i think that has run out. i think the house is dug in and they're not going to accept additional revenue. possible think it is right now as you look at the landscape, and you know little bit about politics, you could to goough in the senate along with a deal that includes higher revenue and something to replaceements, the sequester? >> my view is they should agree they hate each other. that is a place where they can start finding consensus. theof the dinners aside, kind of revenue the president needs is never going to pass the house under this congress. and therefore, i'm coming to a

solution, they need to have a shorter-term plan to get them through the next few years, get rid of the sequester, restore the investments that were in the baseline that were agreed to, stop this craziness over the debt limit. and just get a deal together that can last. >> that would have to involve higher revenues. >> the number is a lot smaller. >> one of the arguments the tea party makes is the reason we do not want investments because it is wasteful and inefficient. you wanted it the economic recovery act of 2009. give a scorecard as to what kind of waste and inefficiency, fraud, whatever there was. it was a big program.

>> a lot of money, and $800 billion. >> we will leave this discussion and go to coverage now of the daylong summit on debt, deficits, and the economy. it marks from alan krueger. this is just getting underway. >> that has been the challenge. you have to recognize the political constraints. give a device? is it on the basketball court. is it in the morning. --n do you >> never on the basketball court. i played basketball in junior high school and have not been brave enough to go out with the president. we brief him on all of the major economic indicators. it varies a little bit over the course of the year, when you're putting together the budget, the economics team is meeting more regularly with the president.

when there is important movement in the data, i will go see the president and talk about the economy. it is hard to say. and of course his travel schedule is relevant. one of the surprises as i have much more contact with the president than i expected. and much more, a high level. he gets economics. it often feels like talking to a calling. a line like this, and then it has changed. there is something that change. republican or democrat, something has changed. what are we going to develop income growth to get back on track yucca >> --track? click something has changed. if you project out the growth rate we have had, income would be substantially higher today.

i think what has changed is a mixture of factors. fundamentally the job market has changed. if you look at the distribution of wages and salaries, the become much more skewed. the middle has shrunk. this has been developing a long time. i think it is going to take a wild to overcome it. i think some of the changes the , such as fought for the affordable care act, will help middle-class families. we'll provide more access for quality healthcare for family struggling. effort toanges, an protect the middle class from sing the tax increase has brought about tax fairness. if you look at the countries that have avoided this problem, they have done a better job expanding their education system. canada. if you look at how canada did in terms of job creation, it did

not prevent the rise in inequality but it was affected by a less extent than the u.s. they have done a good job over the education, they have done a very good job over the last 15 years. >> the issue of the moment, immigration. the economics of immigration, what the say to him? away from the politics of the moment. >> i think that common sense -- >> we will leave the bloomberg summit for just a quick moment for live coverage of the u.s. house. members are holding a brief session today.

[captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

theaker o temp the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms, washington, d.c. april 30, 2013. i hereby appoint the honorable andy harris to act as speaker pro tempore on this day. bo presentives. the speaker pro tempore: the prayer will be offered by the guest chaplain, reverend dr. brian lee, christ reform church in washington, d.c. the chaplain: creator god, merciful and just, you dwell above in holiness, a father to the fatherless, protector of widows and orphans, dear lord rescue the weak and needy. deliver them from the hand of the wicked.

gi wisdom to this body. you hold all things in your almighty hand and you have established this house of representatives and every governing authority as your servants that they might protect the defenseless, praise those who do good, and punish those who do evil. preserve and protect our president. humble all these your servants with your holy law which you shine forth in all our hearts. help them to seek peace. you are a god who saves, convict us of all our sins that we might know deliverance from these our wicked ways. hear this prayer for the sake of theerits of your only son, the crucified and risen lord, jesus christ. amen.

the speaker pro tempore: pursuant to section 2-a of house resolution 178, the journal of the last day's proceedings is approved. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the chair lays before the house the following communication. the clerk: the honorable the speaker, house of granted in clae -h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on april 30, 2013, at 10:41 a.m. thathe sene requests the return of the bill to make corrections in the engrossment

of the bill, senate 853. with best wishes i am, signed incerely, karen l. haas. the speaker pro tempore: the clerk will read the privileged message from the senate. the clerk: ordered, that the secretary be directed to request the house of representatives to return to the senate the bill, senate 853, entitled an act to provide the secretary of transportation with the flexibility to transfer certain funds to prevent reduced operations in staffing of the federal aviation administration, and for other purposes. and that upon the compliance of the request, the secretary of the senate be authorized to make corrections in the engrossment of the aforementioned bill. siped, nancy erickson, secretary. -- signed, nancy erickson, secretary the speaker pro tempore: without obn, the request is granted. pursuant to section 2-b of house resolution 178, the house

stands adjourned until noon on friday, may 3, 2013.

we appreciate your joining us here to talk about the sec and your challenges at the agency. you have been there for four years and a lot of people know that you knew the president back in law school. i learned a few other things about you just recently. served on the iran contra staff at the time. i thought iow that, knew everything about your biography, but i did not know that. dj,were also a midnight your first real broadcast will experience? >> all of those things are true. i also worked on ambulances in manhattan not to do that as a

career. i did not drive them, but i was they loved going the wrong way down a one-way avenues in manhattan. that did not sound safe. >> bringing you a unique perspective on the 911 system. >> absolutely. absolutely. >> let's talk a bit about your time at the fcc and what has been accomplished. as you look back right now, was it a harder job than you thought? what is it you are most proud of as you get set to depart? >> it is a hard job. i knew something about it. i had spent 10 years in the private sector in internet, media, but it is a hard job and the polarization of washington has not made it any easier. we are at a time of incredible change when it comes to communication technology. we seet every day in our own

lives. out the right set of policies to drive economic growth, to harness the step -- these opportunities is not easy. combined with polarization, it is a challenging job, but i am proud of what we have gotten done. >> we have seen the list of accomplishments that have been touted by your supporters, by the agency itself. let's talk about broadband access, the national broadband plan that was implemented. where do we stand right now in terms of everyday americans using those high-speed devices, and otheripads vihat anged? >> four years ago, think about where we were. on the mobile side we were talking about the possibility of mobile innovation, talking about

it looking at south korea and japan, saying that all the cool stuff was happening there. we were talking about the infrastructure in europe, which had gotten ahead of us on 3g wireless. today the u.s. has gone from laggard to leader. around the world people are using american apps can and mobile operating systems. devicesentage of mobile with american made operating systems in four years has gone from 20% to 80%, largely as a result of apple and google, it is an amazing fact. we are leading the world, leading the world with 4glte,an extraordinary platform for innovation. it will be for quite some time. we have laid more fiber in the than wen each of 2012

did in any year since 2000. so, we are making real progress. i will be happy if i can just point to the correlation or causation in terms of what the fcc did, but these outcomes have been our focus, focusing on spectrum, the airwaves, the invisible infrastructure and what we need to do to take care of that. we focused onvi investment to mobile and wired broadband. specifically it was our big idea to develop a market-based mechanism for the spectru over the air people said that it would never happen, but it is happening. transformation of a $5 billion per year universal service loan, which had been in a telephone

nd, has been updated to arod funds. certainly not on a bipartisan basis. we have taken bold steps to promote competition in the mobile space and taken broad steps to preserve freedom on the platform. i am pretty happy with what we have been able to get de. re.the u.s. is in a strong position. >> those individual items, i have heard you talk about the spectrum shortage and advancements made on things like 4g in the united states. to what extent does this spectrum shortage -- and i know that it is still brewing right now -- what happens if it does not happen? voluntarily agreeing to give up this spectrum, what is the risk to the u.s. economy and this incredible technological explosion? >> we care about infrastructure in this country, and we should.

we understand that for us to be globally competi, we he to take care of our infrastructure. we have to take care of our communication technology infrastructure. sometimes mobile infrastructure is the hardest place to talk about because it is invisible. the airwaves, you cannot see them, but they are real infrastructure and if we do not take care of that, we will throttle 1 mobile opportunity. the iphone puts a demand on 10%, 20%,hat is not or 100% of what we hadefore ,times more. tablets put a demand on the spectrum that is 150 times more. in the last 20 years of policy- making no one anticipated that, which is ok, but that we have to act and act in a moment. -- but now we have to act and

act in a moment. a number of big ideas to free spectrum for the best mobile infrastructure in the world, some people misunderstand the intent of these ideas. recently commentary that all we had to do was say to broadcasters that we can use your spectrum for anything and that solves the problem. that misunderstands how spectrum is allocated. allocation, that is like swiss cheese around the country. you could say -- all right, holes of swiss cheese can be used for mobile broadband, it does not do much good the way that our mobile infrastructure works. the incentive idea says -- look, we will ce for some broadcasters to exit, then we will do something that only

government can do, shrink down the amount of spectrum allocated to over the air broadcasting and free up brand new continuous spectrum. role that government can anda should play in making sure that we get the country's innovation infrastructure right, a way that through smart policy you can add tremendous value to the economy. a suppliere a 10x affect on economic growth in the u.s.. >> i spent about 10 years in local news, i have to stop you there. i hear many of those local brters o there, they hear you tking about this, they get nervous. i will have to get moved, people will have to find me again -- this makes small broadcasters really nervous. some might see this as a

financial opportunity, but hers are worri about the change. >> a cplof things. broadcasters are in different categories. some of them are absolutely season the opportunity right now. we are saying -- if your interested, let's participate. but the largest broadcasters have also been -- i would say neutral to positive. if you have a large content company, you are a multi- platform content monetize sir. -- monetize you want to be able to monetize the everyone. those companies have said -- you know what? we do care about a robust global ecosystem. the broadcasters who are the moon are the ones focused on broadcasting and may have to move their channels from here to hear. they will be compensated for

that. it will be a digital to digital transmission. transition periodf the important thing from the american economy and competitiveness globally perspective is that we have to do this kind of thing to remain globally competitive. we have to get through it and figure out the best thing. >> let's figure out the other si of this en, bidding on the spectrum. there has been a question on how these auctions are going to work. i saw a letter from at&t the other day. pretty strong language, they the department of justice sent you. they basically said that this was about smaller players, like prevailingt-mobile, at the expense oof verizon and at&t. they asked -- is this auction rigged? >> not at all.

there are two fundamental goals. one, every mobile operator out there, including the largest ones, they need more spectrum. that is why whave t this. but i am convinced that the auction will be designed so that everyone can get more. at the same time it is very important for an innovation economy that mobile remain it in that first interview one of the topics that came up was that the face of mobil was moving toward duopoly in the west. two carriers, that will be it. i am convinced that that would be a very bad thing for the innovation economy in the u.s.. this platform that we now have where we are seeing quantitative work, that would be a risk. that is why did something that was absolutely of hard call, taking steps to block the at&t t

mobil transaction. we took other steps to make sure that there would be a fair competitive landscape. >> and you thought that was the right goal. >> absoluty. three years ago, 2 1/2 years ago, the mobile market was on the doorstep of duopoly. people thought it was inevitable. some people thought that it was so inevitable but we should go ahead and did -- and approve the transaction anyway. look at it now. instead of moving down, t mobil and sprint are moving up. we see ads on television from team will with their new bu model. meanwhile, at&t and verizon are doing exceptionally well as well. increasing investment, and evading to help drive the economy forward. in fact one of the things we have been able to do is while at&t did not get more spectrum

from the t mobil deal, they would have also got a lot more customers and would not have been much of a game, in other ways by freeing up spectrum we have enabled at&t, verizon, sprint and the other carriers to get more spectrum, this is an approach that the sec has to take -- by the way, the more competitive these markets are, ss government has to engage in the kind of behavioral regulation of businesses. >> you have got another nomination that is being talked about rig now, geing a lot of attention at the sec, the bidding war for sprint. cut a first of all, the fact that you have a bidding war, what do you make of that? is that a good thing in and of itself? will you be around?

now,am not going to start i am still on the job, but to your qion, tdea that we have multiple players saying that they want to be in this business, competing, being a platform for innovation, that was not something that was thought possible a few years ago. one, we have been able to create a market that is competitive whereestorsre optimistic, not pessimistic, and two it is a more broad commentary on the growth opportunities around mobile. even if this is happening, the larger companies,erizon, at&t, they continue to grow and innovate. the rest of the world is looking at what is happening here and saying -- how did that happen? we must have been paying attention to someone else. >> getting questions from the audience, i want to talk to you about another big component of fcc, and thathe

neutrality. as i look at some of the comm, ethe issuheou have tick people on the left, the right, with you in between. satisfied with the results. are you satisfied? >> when i took this job four years ago, these neutrality betwn the technology industryes with tremendous amount of uncertainty and a slowdown in investment and commitment to this -- to the space. for myself, i tught we wod try to resolvehis. it was a lot of work and it was not easy, but three years ago we adopted rules for a strong and balanced framework. i set out a goal for that. setting a frameworkhat drives massive private investment on

both sides. to our innovators, our technology innovators, mobile innovators on the software and applications side. and let's drive masve investment into the networks, because we need both. three look at the world years later, that has happened. .rivate investment in the edge private investment in network is way up. year,g faster year over including china. projected to g 13% year over year. that has been the story for the last couple of years. people are not talking much aboutda n.

why's that? it is working. early stage investors are investing, networks are investing. pending.n is it is unfortunate and it is the single biggest source of litigation in the state, but around the industry with the exception of the extme, it is working and is something i am proud of and we need to work together to sustain this balanced framework and make sure that the opermva, sustaining itf and is protected as we make sure that there are incentives for massive network infrastructure. >> are you going to win that case? >> i w. more importantly, i think we have won the debate on what the right answer is. one, we should protect internet openness and freedom.

i think that in the last three years with thesees businessrdening of norms and social norms for speakers and networks that is extremely important. you can only do so much with regulation. i do think that it is important that these rules take pcebut i think that there is such a broad recognition that this is the right thing to do that it will sustain itself. >> all right, i know that we have some questions. >> the first question comes from our own bob white men. with so much competition between fixed and wireless broadband, does that not imply less regulation by fcc over time? >> i agree with the premise, that women -- that when you have vibrant competitive markets, you need less regulation. we are not there yet when it

comes to the provision of broadband in the home. in many parts of the country there are only two choices and in some places only one. wireless doest provide a potential opportunity for competing in the broad band the home sect. it is a very robust technology that could be a product that could be substituted for wired broadband. being seeing that explored by businesses. not to the point yet where consumers say -- yes, i have a choice between the different options, including fixed wireless. we are doing everything we can to make sure that we are not a barrier to the rollout, because the kind of competition would be fantastic. >> i will do my best to keep me on -- keep this on time, so one

final question. as you get set to leave the agency, what is the note going to stay inside the desk drawer? and that he recommended that person to the president? >> first of all, i definitely think the note will say -- do the right thing. the economics and technology, do the right thing. i was taught never to leave a meeting without and ask, so i will treat this that way. one thing that i saw stakeholders to in the last few years that was helpful was that they gave the fcc the ruling to do the right thing, even if they did not always agree. by participating in an honest game, a fact and database process. then they moved on. agency when they did the right thing. i am convinced that you can do the right thing in washington

and get away with it. i would encourage my successor to do that. >> thank you for the time in joining us here. best of luck in your next endeavors. >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> the bloomberg summit on debt, deficit, and the economy on c-spanall day here -- in washington. coming up later, bob mcdonald and ed rendell. we plan to bring you that later here live on c-span. and now back, live, to the bloomberg son on the debt, deficit, and the economy, taking place here in washington. skilled to use a very input. that is one factor that has been going on. a do think that we could do better in restraining the cost

growth in higher education. a way ofuld be harnessing that in some subjects that complement's traditional online structures. inflation environment has been lower over the past couple of years. to that part of the question, i wholeheartedly agree. >> i think the broader part according to the questioner, for the americans to feel that everything they pay for goes up in price, economics tells us that that is not actually happening, but it feels like it. >> that is interesting, there is a tendency to see prices going up more quickly and the war that one focuses on that, the whole market baskets. that is a national tendency. the reason why you win the nobel prize, if you see a price go up,

like gasoline is one that people see every day, even though it february, march, and april. >> they would do that? i am shocked. >> i think that there is a tendency to sit it out. way, i learned that tom was a guitar player. >> you did? >> when we worked in higher education we worked on concerts', one area where i have done some research. on the line they have lower those costs and also the revenue from selling those old records. do concerts' at the profit center. a study see them doing

of spot a fight and pandora -- spotify and pandora. >> we have some other questions, but tom's free concert in central park? you are invited. >> what can be done to stimulate job growth in the next six months? >> one very consequential thing that we could do is replace the sequester with more common sense, a sensible budget policy. that would bring more certainty to the economy, address debt problems, and it would remove the unnecessary cuts that will do more harm the longer they are in place. the president has proposed using $40 billion for a fix it first initiative, paid for by savings from winding down the wars in afghanistan and iraq,

putting workers back to work today. they would be using equipment from john deere and other companies, steel and concrete, asphalt, to have a broader effect on the economy. >> one last question, then we will wrap up. given global competition, wages on the low end do not reduce, even of the significant reason is the labor force participation rate is so low. >> as mentioned before, trends for wages in the u.s. have gone -- not gone up in some time. i do think it is the case that the version of wages on the bottom have caused percept -- participation to grow more slowly or decline. i think about other factors going on. referred to jobs

there are not in international competition. these are wages the to not jeopardize employment. better than they can raise the overall level of employment. >> a lot of fancy suits and ties in this room. is not veryrica fancy. there is an underemployment rate of 13%. or the othern great distortions of europe. a long-term almost malaise. can democrats and republicans initiate to fight this malaise? this is modern. this is something new out there.

what do we do for those people in america out there who are born out? many americans feel that way. it is not surprising, given that they experienced the worst financial crisis of our lifetime. given that they saw home prices drop so much. given that we lost almost 9 million jobs during the great recession. people are naturally more cautious coming out of that sort of environment. they will naturally think twice when it comes to making economic decisions about how sustainable a purchase or career change would be, enrolling in school or training, that kind of thing. a completely understandable response. understandable and justified. is that we keep digging our way

out of these problems. we have lost almost 9 million jobs. we are following -- finally seeing the construction sector. we need to continue to make progress, but we would like to see faster progress. i think it would help a lot and the rare and people deserve to see congress working together with the administration. no one wanted the sequestered to take place. it is a sign of dysfunction and both republicans and democrats calling this bad policy that we should avoid, yet congress could not. the president will keep fighting to maintain recovery, speed up the recovery, keep working with congress wherever they can to bring about a sensible budget policy. i think that that will help. but the problems could not be solved overnight. i think that if people see problem -- -- see progress, that

will help, but i think the people are traumatized. >> thank you so much. >> thank you as well. [applause] next panelist our out there, a challenge to be discussed, the real cost of health care, what to do with all of those health care benefits promised to workers? he is the managing editor force -- four states and municipalities of bloomberg. richard, the co-chair of the task force on the state budget crisis, former lieutenant governor of new york, we have got governor ed rendell, a former governor of pennsylvania. we heard from the court -- the ago.ent governor a short tim he is also a former chairman of the democratic national committee. and we have the president of

aarp here in washington. conversation on another difficult issue facing policy- makers. with that i will hand it off. >> thank you so much. welcome to you all, thank you for sticking it off -- sticking it out to lunch. i apologize for my scratchy voice. we have a terrific panel for you here today where we will discuss elephants, rhinoceroses, giraffes, and other large animals in the room. numbers, just for a second, before the discussion of this issue, how many of you know what opec is? -- opeb. that one gets by me as well. other post employment benefits.

in itsy of new york, most recent report, $86 billion in promises made to current and retired workers. probably headed up to $100 billion. in new york city debt amounts to about $10,000 per person. detroit, detroit is in such dire shape that they are under emergency management right now. states, neb. -- a really rich state, lots of oil, almost $17 billion in basically unfunded retiree liabilities. it sortey, connecticut, of goes on and on. hitnumbers were probably

the hundreds of billions, if not trillions. this mirrors something that we face as a society. ,s a pure industrial society maybe there are not enough of new workers to help to fund our retirement needs. to use the word from the last panel, it will take some real localities. look at the big picture. what does this mean for us as a society? the zoom down to what it means for states, municipalities and finances. what are the of the solutions? -- other solutions? all of those problems, you cannot have.

promises thathose were made to us. neither of those may be the way out. this is a very creative society, maybe we will find an answer right here on the panel. let's start with [indiscernible] from aarp. please refer to it as that, i called it arp. if anyone has the big picture as well, as well as solutions, it is you. what are we facing? identified one very big piece of the challenge, but it is not just the funding at the municipal and state level. it is a broad issue of if we are willing to have a society with 25% to 30% of us living way past 90.

programs thatfor have some minimal level of dignity when they retire? slowlyd retirement is but surely becoming anachronisms. that socialgrabbing security at the age of 62, more and more people are working for as long as they possibly can. some of it because of guys like this who will never stop working, and others like you, who are desperate to keep the money coming in. but seriously, more and more people are having to figure out how to keep the income going. grouper i say that to a like this, everyone who wants to live on $14,000 per year, raise your hand. i do not get a rush to the podium. how do we provide bolted personal savings with pension or retirement programs in social

security? and, that allows people to live these ever to -- in come the allows people to live these ever longer lives. we have to look at this whole mosaic and say -- what are be going to do with this? what to do with medicare? immediate cost challenge problem. how do we encourage people to take responsibility so that they can make a personal contributions they have to make? at the broader level being outlined, individuals -- there are lots of different states that have sort of dealt with this. probably one of the saddest things is that a lot of them skipped their payments. we get into a political question of why they do that, but if he said that you're going to put some much money into the pension fund, right? that is part of the problem. others have begun to talk to each other. all of the constituents have

we gradually get to a moreidlace? certainly we want to help people receive the benefits that they were promised and paid in four. understanding, governor, you can help me with this as well. ,he vast majority of pensioners we are not talking about the egregiously wealthy, but people you get apaying in, certain amount taken out of your check. that is the relationship we want to preserve as long as we can. then the question is, how do we bring people together? paul, your commission, you have examined this issue. how they is the problem? let's focus on a healthier issue. pensions are a part of that.

how do we get out of it? >> there is no question that the issue of what kind of retirement system that we should have in the united states is something that should involve private and public employees. that is very much a front burner question over the next decade. it cannot be addressed now. the open liability the issue described, $300 chilean nationwide, th was never reported until the issue the ruling that the department of financial statements had to reflect on in terms of liability. terribly underfunded, growing as the people live longer and health care costs go up. what is happening there, it varies from jurisdiction to jurisdiction. in some places, like new york

city, the obligation is statutory, not just a function of collective bargaining. a legale there is question about whether that can be modified by a substantial contract or if someone who is a teacher in the first year, at which time in time there is collective bargaining for health benefits to be paid for until the roll comes up for medicare, the customary provision, is that -- cannot be modified subsequently? outle always like to point that the obligation does not have the same sanctity, if you will, a pension obligations, but pension obligations, a constitutional pension benefits, they have constitutional protections in five states. in the balance of the states the reliance is on the flaws in the

constitution, usually applicable obligations, as well as others. what is very important is to understand the true cost. to understand what is getting squeezed out. because it is perfectly understandable of people in public life who say that the obligation to pay promised benefits to someone who work for you to -- for 20 years is morally and distinguishable from a promise to pay someone who lends you money. are toor those promises be treated as serious bonuses that you want to keep in a society as you are aware of the fact that increasingly what is happening is that your opposition is not coming just

from right wing conservative groups, it is coming from people concerned about infrastructure, because infrastructure is important to them. people worried about higher education spending, which is going down. k-12 education. isblame that on retirees probably an unfair characterization, but the fact of the matter is that the growth squeezed out other arguably more short-term expenditures. did this work out through you? dick is right, of course. these pensions are sposedly funded, but they are pay-as-you-

go. benefits happen almost in every state. you cannot go back and change benefits. bettis " we did in philadelphia and pennsylvania. we restructured the pensions with benefits. but you cannot the back. health care benefits there are different, and funded. they were right about one thing, in most states the employees never paid in. , it is from the mayor of philadelphia. . just got the 78 -- no pay a dime towards until you stepped

.nto my way i told them that there were dinosaurs. did not pay in. we were being paid per retiree $9,700 for year with 16,000 in the system. it was critically obvious that we would not be able to meet our observations. we would have defaulted or acted to skip payments. but all that needed to change was the requirements. way, we made retirees pay

in 1%, now 3%, of their gross, last final showers. on the copiague pay, 10 to 18 bella. not easy to do. the change from traditional medicare to private service medicare. we have been introducing a lot of on funded liability. $64 billion. it is new york state, $71 billion. texas is $50 billion. new jersey is $69 billion. will i want to move it from

one -- it.on a for a >> you tried to rationalize the system and make it more efficient. >> it iss everyone interesting. was a pre-progressive democrat. my me, i did this with employees and the unions, they did not like it. it was easier for them to get it in some states. will nobody liked it. i did not like it. -- nobody liked it. i did not like it. but when we asked them to bring

more it was a tough thing. it is the only way to solve the crisis in the long run for everyone. i just felt that we had to do something. i think that what we were left with was more efficient and effective. we have lower the prices dramatically. -- lord the prices -- lowered the prices dramatically. they called the devil's bargain. i guess i was the devil. but i did not mind doing it because i believed it was the right thing to do. >> well, there is no question that a courageous governor makes a difference. some states had statutory hurdles that were not easily overcome. you had to look at labor laws, the laws of contracts, as well

as determining what you could do. in new york we have the absence of a new contract with conditions to prevail. cannotre it is that you reduce the health care benefit unilaterally. it requires binding, which means that some people elected to office have to make some weird, tough choices. they're going to insist on reductions or contributions, having to make of the sacrifices. second of all, it is important now,derstand that up until there have been so many other ways that states and local governments debated the kick the can down the road. having to deal

with these budget killing numbers have been avoided. proceeds asring revenues. selling government assets, treating those as revenues. of 1 shots.ng out we are running out of the luxury of the budgeting system at the state and local level, hiding from the public at large what is the happening. did a bond issue to try to deal with the problem, kicking the can down the road, but what is the difference between each statute? they can change in one month. take amendments out, which in those states can be virtually impossible.

do you know how many members are state and local workers? >> probably reflecting the workforce at large. people oppose this ,uestion to the aarp membership "and what can i do about my health care needs and how much more will have to pay to make sure that the obama plan is the promise i guess"? these benefits are treasured by people. look at a 70-year-old person and say that i will take your medicare, even remotely suggest that, you get a fairly sparse and understandable reaction. right next to that is the truth of care. one of the things i wanted to ask, you are successful but not

just because it was the math telling you to do something, my guess is that you have filtered through all the stakeholders. >> compare public-sector benefits to private sector. taking all wages, they will never remember that at all. whenever the benefits are that ,hey believe they have earned 20 to 30 years of work, and whenever health care. if someone says that they have a

problem, let me hear the solutions. it is everyone's challenge to contribute to the solution. the breakdown is that sometimes it feels we are shifting the rest. we hear people talking about medicare, moving it to a more market-based. sounds like we are just moving the rest. that is the sort of full crumb of people's willingness to look things in the eyes about what is happening here. second is adequacy. i cannot emphasize enough, where in as it code if you look at this addendum here, this is one of the top five places in america. 20% of us are doing pretty well.

1% of us are doing really well. 80% of us are just trying to get to friday and as the ages, that number grows. we have to be careful that we do not shift the risk down. >> he raised something that requires noting. that requires proposals to address the federal budget and suggests that increasing the eligibility to medicare, 65 to 67, a great deal of money. if any of those players even attempted to calculate what the cost would be to state and local governments who have contractual or statutory obligations to pay these bills,

those retirees are eligible for medicare. i would say hundreds of millions of dollars toward further fiscal situations. >> an interesting part about is listening to it. the inescapable conclusion that i have resisted, since we had to wave the flag that government is the answer, you reach the conclusion that we should be a single payer country. if we were a single payer country, we would not be talking about any of this. businesses out there -- [laughter] audience, why the are you not for single payer? you could have your bottom line and be competitive with all the other countries in the world.

do you know what the minister if costs are for medicare or the hmo? 2.5% for medicare, 10% for hmo. it is unbelievable what health care costs are when you of the e man. i know it is maybe oversimplification, but you sit and listen to all of this and there are so many different issues. eventually, you think, what are we doing? we are trying to fix something like try to put your finger in the dike. every time you plug one hole, another opens up. there is a better way. it does not mean that people cannot get a higher level of care. you could have medicare for all and then medicare advantage. if you want to pay for it, you can pump up your coverage of anything you want, but the basic delivery system is medicare for all. >> one of the things we point out, we are asking the wrong

question. the article was a genius. his question was, we are arguing over who pays for health care. asking, what does it cost so much? medicare is on top of the health-care system. $2.70 trillion, more than any other industrialized company -- country. we are ahead of slovenia, though. no. 37. and we accidentally killed 237 people. when you focus like a laser on that $2.70 trillion and see what we can do to slow that down, if we did that, of the long-term outlook for medicare is reduced by half. population will continue to be that. there are a lot of us country. age, we

but the whole health care cost makes -- that makes an enormously important point. unless we have a national focus on health care and the total system cost, we are going to miss with the real problem is. about cost andou problems, maybe this is one for both. dick we talk about this problem being in the trillions of dollars, the health-care problem. i look at the municipal bond market. right now, it is doing just great. all the bond markets are doing great. the municipal bond market has not performed almost any other asset you can imagine. ie judge here the bond -- looked at it this morning -- returning 12.5% in the last 12 months. it is age, but the like equity returns. why aren't investors screening for the exit?

all of these governments are going broke. debt and theng the promise. so why is there such a disconnect? >> for seven reasons. -- severall, reasons. first of all, the old punch line, compared to what? states andll, cities, knowing that their only to cash isess through the credit markets, make sure that the first thing they do on the first day of their appropriateis to the money, ahead of any -- every other appropriation, to make

sure any contractual obligation that underlines the debt obligation or any interest obligations are paid first. second of all, there is an actual trend appropriate the towards the alley wing revenue bonds, bonds that are secured by a meaningful revenue stream, a valley waiting those more favorably than the general obligation bond of cities and states. the rating agencies have not necessarily been correct in their evaluations. i do recall in six months before the city of new york almost went broke in 1975, the upgraded the credit of the city. they occasionally make mistakes, too. in the final analysis, we could not have a functioning society if there were massive defaults on the parts of obligations of cities and states, so there is a societal interest in making sure those obligations are met. what iswing revenue criminal, is

street community continues to go to governors and mayors and say, we will solve your operating budget problems by discounting your future revenues. borrowing for those reasons is obscene, frankly, but it goes on, and it could be stopped by federal law, it could be stopped in many different ways. that is very, very different from bar wing for what is appropriate uses, such as investment in infrastructure. >> the last point that you made is the most relevant. the bond market does not believe -- and they have experience to back this up -- that any municipality or state will go bankrupt. some attarting to see the ages. -- edges.

what if they do not have a solution and harrisburg goes bankrupt? once it defaults on their obligations, harrisburg will not get credit again. >> i am glad you brought up and --tcy there is that ultimate weapon. bankrupt,nty went right, and it went back into the market again. so the doors were not closed. in the private sector, there is chapter 11, the banks are right there by your side offer you more money.

>> even if you can get credit, if you have gone bankrupt, the interest on the credit is just suffocating, absolutely suffocating. why would it not be? we have a ratings system. that means money we do not have to pay. >> bankruptcy is impossible for states because of the 11th amendment of the constitution. it is also, in my view, an admission that democracy cannot solve its problems, if we are going to turn over to a judge, even if we were legal able -- legally able to make those decisions. what we need is not for bankruptcy. we need more politicians who are willing to tell the public the truth. with that.ot argue

unfortunately, there has been a showingend towards bankruptcy's in places where it is easy to do. one of them involves an attempt to stiff calpers. to pay the they want pension benefits. a moralrt of like equivalency issue. >> do we have a moral obligation to make good on health care promises we made as taxpayers and citizens to our employees? bobhere is a difference and made the point, if they paid in for any length of time, then it is a promise that they earned. social security, that is your best argument. dick isaid that,

right, we need politicians willing to tell people the truth. if i had a bunch of pennsylvania retirees with me, and i tried the best i could to communicate directly with them, i would say, look, guys, we can keep going down this road and keep paying the 100% of what you think you should get. we can continue that but it may fall off the cliff in one year, three years, we may not have the money to make payments. or we could make some slight .eforms, relatively remember, when we headed into this deal, he would get retiree health benefits, or at a time when the life span was a decade less than it is today. maybe we should abbottabad but we did not. we just cannot absorb the price. we are glad everyone is living longer.

you are especially glad of that as you get older. but we do not have a system that cannot absorb all of that. if you could talk to people and tell them the truth, it is amazing. i once gave a speech at harvard for these upper-class retirees. social degree program. i gave a speech about this question about the debt. it is easier for these folks, but people are not dumb. do not givecians, the people credit for the intelligence they have, nearly the amount of reasonableness that they have. know joe scarborough is a good storyteller, but he is correct he voted to make changes in benefits for seniors, and he

campaigned all around his district in the pensacola area, a lot of retirees, and he explained it to him, and he was reelected by a higher margin that he was elected. if you are showing people that what you're doing is under the circumstances reasonable, they will accept it. but politicians are petrified. look at the gun club. absolutely petrified of a small slice of their citizenry. 94% of north dakota and said they wanted universal background checks. >> i cannot leave this without giving ed credit. i amabsolutely petrified of a sl slice of their citizenry. 94% of north dakota and said everythingto look at in the health-care system, the

drug costs, but everywhere, not just hitting you guys. >> the pharmaceutical companies have been making too much money. >> everybody has to share in this. campaigned all around his >> peter, you have some questions frnce? aarp what heard from we cannot do to adjust currently receiving benefits, so what do they believe is a solution to the pension, health, and social security problems we have now? >> do we have two hours? the major focus is on health care system and on everyg in the health-care the reforms that we can make using medicare as part of that system. there is a tremendous we can do and hundreds of billions if not trillions of dollars were medicaid can be made more efficient, and at the same time, make the health care system more efficient. could notwalmart they negotiate for the price of tide with procter and gamble, that is the same thing that we do with medicare. there are things that we could

do to slow down the cost curve for all health care. that will affect businesses, as well as people at the kitchen table. there are a series of reform were medicate can be instrumental in but we need to put the focused on slowing the cost of health care so we can have affordable health care and a lower cost. we are still 50% higher per capita than any other industrialized country. that is embarrassing. >> you remember the debate when stages,was in its last and the legislation that joe lieberman crafted, it was to buy intotirees medicare. that is a common-sense proposal. >> perhaps gov. rendell and dick ravitch would like to weigh in on this.

do you believe that they should be able to negotiate, as they did with general motors? the remember in 1975, when banks and unions, and the president ended up doing what they swore only weeks earlier what they would never do, that the threat of the bankruptcy had something to do with their decisions. tell you, one of the things that was done in 1975, was to pass a law declaring a moratorium on the payment of interest of new york city's debt on the theory that that would give expense relief to the city's budget for a period of time. ultimately, the highest court of the state found that unconstitutional and said that the state must exercise its taxing power to meet its obligations. i am not suggesting that that necessarily would be the

ultimate law of the land affecting every jurisdiction, but that was the decision of the highest court in new york state. if you think about it, you could argue, the greatest risk of the improvements that characterizes the management of so many governments today, the greatest risk is compensatory levels of taxation, not a failure to provide the promised benefits to tens of millions of people. >> we do have more questions but i am told we have to keep everything on schedule. i want to thank the panelists for participating. we are going to get a better sense of these state issues may be in a moment from our next panelist. it is the governor of the commonwealth of virginia, gov. bob mcdonnell. we will ask you all to exit the stage, if you could, so we could make room for governor mcdonnell and the executive editor for federal, state, and local news

within our washington bureau here. susan, if you could come on stage and the discussion with governor mcdonnell. the coonalth of virginia has seen a lower unemployment rate than a lot of other parts of the country but a state that is dealing head-on with the impacts of sequestration and the budget battle. i know we will get some perspective on that from governor mcdonnell. as they make their way onto the stage here, former governors, always a governor. susan, take that for care there -- chair there. governor, thank you for coming. we appreciate it. governor, thank you for being here. i know we will spend most of our time today talking about sequestration and taxes and job growth and the like, but there

is this giant news guerrilla in the room today. i really feel like i need to ask you about that, with the fbi looking into your ties with star sign terrific and its chief executive johnny williams. i know he has been a major donor of yours. he ended up paying for the catering at your daughter's wedding. now the fbi is looking into that. what can you say about that, what can you tell us about that? >> i can talk about sequestration and impact on my state. >> and we will. >> as a policy, i do not talk about investigations or potential investigations. i have not read that article. i know that those reports are out there. i think what is important is, i have been in office for 22 years. i diligently from a reports, i was clear -- my daughter had her

wedding two years ago. i believe the gift, as it was given, was given to my daughter. under current -- near rules, gifts given to children or spouses or non-office holders under current law or not reportable. there has been a lot of discussion about that. i understand the concern and is in part to have open and honest government so people know if there is influence. i have reported over the last four years, $25 million of campaign contributions from people all over the state and country made to me and have from my disclosure forms, my pact forms, a campaign contribution form so that everyone knows what has been donated. here is what i will say. it is important for citizens in virginia to know, one, there is nothing going on that impairs my ability to do a good job as governor.

you look at our unemployment rate, our surpluses, we're doing a pretty good job. and it is a team effort. it is not just me. is fundamentally -- i am blessed with number of friends. even governors are a lot to have friends. mr. williams and his wife have been friends of my wife and family for a while. but i do not do at anything, whether with mr. williams or his company, or any other person or company, to give anybody special treatment when it comes to the way we run our government. there was an example of that was clear a couple of weeks ago, no economic grants of any number of friends. even governors are a lot to have friends. mr. williams and his wife have been friends of my wife and family for a while. starthat have gone to

scientific at the time that i was governor. >> you mentioned the financial disclosures for you and your pac. i know mr. williams and his company made about $125,000 in contributions to you. when you have the events for him and his company at the governor's mansion, your wife speaks about the company and its products to doctors, do you think that has an appearance of a quid quo pro? does that raise questions? >> the reason we give disclosures, people will make a determination. i think some of those facts are wrong, susan, with all due respect. i explained knows when the press inquiries first started. my wife went down -- she has starin the pharmaceutical

business for a while. she has a great interest in alzheimer's research. there was an institute, a clinical trial that was being done, a laboratory study, for alzheimer's with this. the pharmaceutical businessshe wanted to talk to ds campus and tour the learn about clinical trials. she is excited about a virginia company, the state of research. the event at the mansion, as i firstwas courted by the lady's office. virginiacause this company was actually handing out grants money to va medical .chools, medical systems the purpose of that was not to be stuck any particular benefit on the company, but as it was explained to us, they were giving out grants -- >>. sure any virginia

company would love for you to talk of their product, or your wife -- >> that is the point i would like to make to people. during the time i have been governor, i have done hundreds of events, all over the state, all over the world. i just got back from china and japan and california. we were there for 17 days promoting virginia businesses and virginia products. specific virginia businesses that were there to range trade deals, agriculture, technology. this is the heart and soul of what i do as governor. my top priority has been creating jobs. >> just another company that you are sure any promoting? >> if you look at the events i have done, i have given out grants to the companies through the governor's opportunity fund, through other state resources. some of those might have contributed to my campaign or others, but they are based on what we think will promote growth and opportunity and jobs in the commonwealth of virginia. as i said, what is important for the citizens of virginia to

know, is that when we make decisions in my office -- and i insisted on this at the beginning of my time -- we make decisions about how certain things will be done. i get requests all the time for things to be taken in or under the budget, things to be passed, programs that people want us to evaluate. my secretary and cabinet are constantly evaluating people's proposals and products and so forth. i guess this is part and parcel .f what government does i think it is certainly fair to be able to ask those questions. i have been clear, i have gotten flights to my pac,

there have been gifts to be by mr. williams and my company, and also multiple other people as well. for all i know, some of those people may have asked for certain things as well. what we do, what i have directed my staff to do, what the economic development people do, when they have proposals made and they are asked to evaluate those, it is based on marriage, payback, and based on our ability to create more jobs and more opportunities. my wife is the first lady. you know how much she gets paid? 0. she is a volunteer. she has done a great job as a first lady. this is important to know -- i invite people to look at her website. the top priorities in her flight program, as it is called, is the first lady's team initiative. care, wellness, diet, exercise, and number two, promoting jobs and economic development. she has done probably 200 or

more events, susan, and around the state, around the country, promoting jobs, companies, promoting trade relationships and so forth. i think she has done a good and effective job. the disclosures are there for the citizens to decide how they want to look at it, but we do the best we can to make our disclosures. >> if this is all just the course of business, then why is the fbi interested in looking? >> i cannot comment on whether there is or is not an investigation. i always defer those things to law-enforcement to let them make any announcement. what we know is there is a former chef of the mansion being charged with embezzlement. he has a pending criminal trial. i know there have been certain things that have been said in the course of that trial. i do not think it would be proper and i have never have a policy of commenting on any investigation or trial.

i let a lot for the officers or prosecutors to that. >> let me ask you one more question and then we can talk about sequestration. >> that is why i thought i was here. >> this is news, too. there was a report of a picture of you holding up one of the company's products on their website that is no longer there. you ask that to be removed? >> no, but when i was asked, i do not remember where that was taken. i tried that product before. i my pac, there have been gifts to be by mr. williams and my company, and also multiple other people as well. for all i take a lot of vitaminy wife gives me. i have been doing that for 30 years. when i was asked about that, i looked at the picture, i could not tell where that was taken. what i said when that was asked, i certainly did not authorize the use of the picture for them or anybody else. youovernor, i cannot tell how many pictures there are of me on the internet that people have taken and that might be used on facebook or any number

of places that i did not authorize. there are people that use my name regularly for things. i know that there was a specific question about the scope of the star scientific discussion, but i have countless things out there, whether they are quotes, pictures, or my name on invitations, people have said that i am coming to appear at events -- we do not approve most of those people who use them. doing it today and that will be a in some newspaper or facebook page somewhere else. i do not remember where the picture is taken by clearly -- >> well, thank you. why don't we turn to

sequestration. >> that would be a great idea. nationally, we have heard so much discussion about how this federal budget cuts will affect the states. virginia is the poster child, being the home of the most federal spending. if you look at them marginal on employment numbers, -- march unemployment numbers, virginia has fallen at a faster rate, even than the national jobless rate. do you think the impact of sequestration was perhaps overstated, that carmageddon really has not come? >> i do not think we ever thought it was going to be a cliff. sequestration is something, as everyone knows, will take place over a 10-year period. the problem with sequestration is not the amount and volume of the cut. in fact, sequestration is not even enough. -- everyion airport

year. far bigger than sequestration. the problem with sequestration, one, it was not flexible, two, it was 50% defense, and three, as governor of virginia, it unfairly it's my state in a way virtually compared to any other state. my objection was, when you are fighting a two front war in afghanistan and iraq, you have uncertainty in the mideast, north korea, and you are going to cut half of the nation's -- half of the spending cuts envisioned will come out of the defense sector? that is just bad policy. secondly, it was -- sequestration was on top of the four ordered $87 billion of additional defense cuts -- $487 billion of additional defense cuts that took place in previous

years. for defense, it is $1 trillion over 10 years. >> with the ending of the two defense cuts be part of having responsibility? always talk about recognizing the peace dividend once it was there, but there is no peace in afghanistan at this point. your question about what we have we have already started to see the downturn in certain sectors in virginia. certainly northern virginia. lotexpect those that do a of work with the defense department, we have already seen .he downturn

they were already getting their reductions in orders and other things from the agencies. >> we keep going down and visiting in those towns to look at the impact, you talk to people in the towns and they seem like everything is pretty much ok. >> it is not on the bottom line. march and april, we had the first two-overall growth months in virginia in a long time. we have had pretty good fortune in virginia. had record surpluses totaling $450 million each year. what we have seen for the last six months start in the fall. hampton roads, where you see a lot of defense contractors.

hit witheen a bigger negative revenue growth in february and march. our analysts put a fair amount of that on sequestration. we have not yet seen what those are going to do. that will show up likely in the april numbers. some of the agencies have ratcheted back. as people work unless you will see less disposable income and therefore less in a way of tax revenue being played. seen this from noted economists. they had similar analyses of sequestration.

that is the estimated 130,000 jobs over 10 years, dr. fuller had 200,000 jobs over a 10-year period. the economic impact would be in the hundreds of millions of dollars in tax revenue. methods changed with that. money is still coming out of defense, you will have to expect that you will have those declines going forward. but it will not be a flip, it will be a slow bleed over a long period of time. >> those defense contractors are having a bang up year so far. >> the vegas shipyard on the east coast is located in newport news, virginia. what they tell me is that when they are building aircraft carriers or submarines, they get these contracts where they have

plenty of work to do at the defense department. repair might be shorter or a concession longer, these are long pipeline things that you will not see immediately, but over time you will. >> what about smaller contractors? anything there that is likely to be more immediate? >> that is where we are seeing some of the numbers that i described before with the downturn in february and march of this year. some of the things we started to see last year, where everything from travel being reduced to certain types of contracts being brought back in house, things of that nature that are easy. you cannot pull the rug out from underneath an aircraft carrier, but you can change when it comes to some sort of maintenance agreement or travel arrangement, something like that, now being brought back to the house and department of defense.

that is where i think most of the short-term changes will be made. long-term, as the folks at department of defense know, if you're getting $600 billion on top of the 487 last year, you cannot do that just by carloads and things like that. intoave to be able to go reductions. that is what president obama is asking for backgrounds. it is doubtful the congress will do that, but i have already put together commissions that i appointed in virginia to get ready for this. we have got the pentagon and 19 other military installations from 2005. i already appointed a round of distinguished officers to get va ready and start looking at things like transition of defense infrastructure to civilian applications, like modeling simulation and cyber-

security and some of the of the things we're doing, heavy defense related businesses. try want to be proactive and get us ready for the last couple of years to get ready for this. we want to be ready to have this downturn, though it may be slow. >> if the answer to fiscal not these deepis defense cuts, i know you have said you have favored restructuring of social security, medicare, what do you think about the president's proposal to allow for cost-of- living increases for social security to be smaller? >> i think that that is fine. everybody, we are broke. debt.illion in i just got back from japan on friday.

china. economic development missions, japan is not much worse. percentage of gdp. are we seeing an economic recovery here? >> at some point the crushing amount of debt is going to catch up with us. we are almost to the point we were at before world war ii, where the debt is approaching 100% of gdp. that is an unsustainable trajectory. everyone knows that you cannot borrow more than you take in or you grow -- or you go broke. if you look at the projection, 17 not -- $17 trillion is bad, but the budget introduced by the president last year would have gotten us to $25 trillion by the year 2021. so, we do not have a plan. , the problem is

that we are still spending at a clip of $1.20 trillion to $1.30 trillion. entitlementsin in or have significant coverage on domestic spending -- and you are exactly right, my problem, many of us, we do not make half of it on defense. do not put the burden on kids in uniform. i kind of take this stuff personally. my daughter was in iraq. do not put this burden on the kids in afghanistan today when we have not even touch entitlements. that is what sequestration in visions. anyway, i agree, the president said that part of the solution is raining in the increases in cost-of-living adjustments. i tell you, that is a good start, but in order to have the

ends meet and have a balanced budget, we have got to do a lot better. the last thing that would say as the governors live in a very different world. i live in the world of a balanced budget. like a family, i have to balance the budget every year. every governor but one has the requirement, i think. and we have very limited debt ceilings. i cannot print money, i cannot borrow. imposed 5% debt limit in virginia. think that is very fiscally prudent. but in 30 years both parties have increased the debt, except for president clinton. he is the only one that had a debt reduction and i really think that that helps. but the point is, we have over- spent and over-borrowed essentially for three decades.

if we do not have the significant rethinking of how we deliver government services and what does priorities are, this will get worse. >> do you think the people in the country are going to accept that? this kind of reform of social security and medicare? >> if you explain what the options are, which is the masses spiraling and increase of debt of $1 trillion, it is unacceptable to continue to level that on to your kids and grandkids for a number of generations. look, americans in times of trouble have always been willing to sacrifice. that is what my mother and father taught me. they are part of that great generation. sacrifice is inherent in the american psyche, but you have to be able to explain why. to resultt is going

in a greater good. the greater good is the united states of america. anothere ask you about big topic playing out in congress this summer, the immigration bill. we have this proposal from the gang of eight to create a path toward citizenship for 11 million undocumented immigrants in this country. do you support that act? the have not looked at all details of that, i know that the gang had some agreements, but as many of them have said, the devil is in the details on how that works. here's what i think. one, we have had 70 million, 80 million new immigrants to america in the last 100 years. my father, my grandfather came on the boat in 1912. legally, coming through ellis island.

that is why i am here. second-generation, son of an immigrant. that is the story of america, immigration. it in genders' cultural diversity and creates a great deal of strength. so, our goal should be finding ways to increase lawful immigration in the united states, because that means that people are flying by the rules, paying taxes. at the same time, we have got a problem where we apparently have somewhere between 12,000,015 million people who are here either illegally or their visa has expired. everyone knows that these people are not going to be rounded up and sent back to their home country. what we have to do as a start is find ways to expand those visas and guest permits, as we need

more people -- more people with specific disciplines to be a part of the american economy. the people that come here to study, rather than having them going back to their home country to compete with us, i would like to see more people college-educated in america staying here in america. we should look of that kind of thing. i do think that the time has for aow that permanence while now, they have not been able to get a resolution on this issue. there seems to be some good will from both parties to find a way to make sure that this problem is resolved. and then there is a very clear and enforceable task for everyone going forward that they know what the rules are. none.e get these reforms >> how important do you think it is for the republican party to be brand itself on issues like

immigration? or the perception that many women have of the republican party following the last election? >> well, when you lose it is not fun. i think we have done a pretty thorough review. i was chairman of the association last year. i worked a lot with other republican works and said -- why did we lose? you know, national politics is different and state politics. statewide, republicans did very well. from virginia to arizona. holding the southeast and the southern part of the united states, a sea of red. 180 million people have republican governors. >> virginia has become a real swing state, with obama winning twice. we will see what happens. >> it is a swing state, but it has been a swing state for 35

years. not in the presidential race, you are correct. but if you look at the last 10 governor cycles, they have been have democrat, have republican. at the state level we have swung back and forth. statewide, 60% of americans are choosing republican governors. we picked up legislatures in the last couple of cycles. we have the majority of legislators be a republican. governors, legislators, the republican party is doing well at several levels. look at president obama's record in this last cycle, horrible unemployment rates for virtually the entire term, debt is mounting, and popular health care bill. on paper there is no way we should have lost. but i think that they ran a pretty good campaign.

i did not like some of their tactics, but i think that your point is correct. there was a branding that stock, that somehow our party is one that is not sympathetic or in tune with the needs of the middle class, not sympathetic or in tune with most women. i find that to be inaccurate, but that was an effective message that the president pushed. i think that governor romney made a great comeback down the stretch. i do not think the hurricane help him very much. all that aside, i am not making excuses, we have got some work to do. you have seen many of us working with the party chairman of the autopsy. what did we do right? what did we do wrong? not just in turnout and technology and other things, but the message, the substance, the grass-roots effort. being aed about him

community organizer, we have got to be better community organizers for the republican party. >> i think that peter has some questions for you. >> i would give you a question of sees what -- on sequestration. virginia disproportionately benefiting from this spending, with disproportionate costs? we are at the top of the list when it comes to defense procurement. home of the pentagon, 19 military bases, 40,000 active duty. had a 200 year love affair with the military. i am very proud of my state for that. sure, we benefited. but my point is, from a national security standpoint, sequestration was not a good policy for the kids in

afghanistan. as governor of virginia, in high and prevention. when those kinds of national policies disproportionately affect virginia, certainly i will seek -- speak out about it. but this policy of sequestration was really never supposed to go into effect. everyone knows that it was supposed to be a sword of damocles from congress to make them get a deal done over 18 months. they failed to get that done. the president failed to lead. my real objection paillasse, it is provincial because i am a governor of virginia, but you cannot honestly fix the fiscal problems of america if you are only point to cut defense and certain other domestic programs and take entitlements off the table, that is not an honest conversation. >> related question along those lines, wouldn't virginia benefit as much as any other state from

a grand bargain that included not only the entitlement reform you are talking about but also increase revenue? with a grand bargain along those lines not ultimately be a benefit? >> not a lot of specifics there. look, i have advocated transportation bills. finally taking the long-term revenue resources for ingestion, how many of you like that traffic? it is the most congested part of the country. general funds, we have done all kinds of other things. it has had some revenue increases. [laughter] particularly for northern virginia and hampton roads. so, when you have exhausted all other avenues and manage things well, and you have a aaa bond rating, like we do, with the

president losing for america, when you have done everything else can and you make the case for the people that there is no other alternative, the answer is yes. when you are borrowing and spending the way that i think most people believe the united states has over the last 30 years and it has been a bipartisan challenge in managing spending, the case has not been by the congress or the president that the only option now is relative increase. have you managed the resources well? if so, we will give you more. but if you have not and have not for a couple of decades, people saying that you should fix the reform, cut spending, fix programs, cut waste -- that is when i hear from citizens in

virginia, particularly middle- class citizens on these questions. >> the clock is winding down. susan, i will throw in one question that i used to use as a local reporter covering virginia politics. is it time for virginia to reassess the one-term limit on governors? >> every passing day i think the answer is yes. [laughter] there are advantages and disadvantages. it is a very good question. i did support the bill this year to change the constitution. pass the senate, killed in the house. part of it is that every morning someone does woken up by someone else to think they are the next governor of virginia. there are some benefits, i have to say, in retrospect now, as i finish my fourth session, i have a great sense of urgency in getting things done.

second, it does reduce the political pressure. just try to get things done and expand the american dream. that is why i ran for governor. it creates ahand, pretty significant lack of continuity. ceding power to the legislature, ceding power to unelected people, the branch the transcends administration's, it is hard. i have been in office for 22 years. i had a pretty good head start to go be governor. the someone came in brand new from the outside, it would be pretty wild. all things considered, people have a choice. >> let me just ask this really quick, ever forget -- every

virginia governor seen as a look the mirror and say that there is the next u.s. senator. [laughter] is that which you think? >> no. >> what are you going to do? >> right now i have my daughter's wedding, and then -- >> that is a full-time job, right? >> oldest daughter was in iraq, i am really happy for her. at a couple of things i am doing it regarding retooling regulations, things we would like to do, restoration, i would like to streamline that and make that better. i have restored more rights than the other governor in virginia. i have a spate of projects. if you look of the hill far enough down the road, you miss the mission in front of you. right now i have plenty to do to

keep me busy. i will worry about that later on. >> governor, appreciate it. [applause] invite ourwe will next panel up here. regulation, corporate tax reform. governor, you might be interested. appreciate it again, governor. this panel will be led by the regular compete -- led by our senior analyst at bloomberg, and the president and ceo of the aerospace industries, daniel blazer, president and ceo of marshall klein and companies, from the american action forum, the former cbo director, chairman of the peebles corporation . we appreciate all four of them being up here for this conversation. neil? it is all yours. >> thank you.

a great panel to wrap up the day. i want to start with the last panel of sequestration. you cannot talk about corporate tax reform without discussing the land to deficit reduction. connect to this got together with sequestration and the role of corporate tax reforms? the governor laid out clearly with virginia, it is the national level. there is no question about the fact that we are having a federal budget fiscal crisis that has to be addressed. but i will tell you, talk about the worst possible way to do it, the sequester. if you take the kinds of numbers that the governor used in virginia -- granted, they are one of the big ten's states, but taken across the country we are taking -- talking about the loss

of 1.5 million jobs. 25% of the jobs. it is taking time for the sequestered to come into play, but you see that on wall street right now. small companies are already really taking it in the neck. that was seen all across the country. an enormous effort. aerospace and manufacturing is in small companies. corporatee the administrator of the faa. did the compromise here opened a window for how the defense industry could be asked about sequestration going forward? will we see more compromises? >> we may very well. the paine immediacy of

in terms of sequestration but it came to delays and the control abroad that was taken off, but when they got the money they went right to the investment account, which is a very dangerous thing, to eat feed corn for what we do for our infrastructure. all of that money, theoretically it is something out of their airport account. but you are just spending for an accumulation of problems and we are trying to convert to satellite-based digital air traffic controls everywhere else in the world. if we do not do that, where are we going to be in a few years? again, that is money that the public does not see it immediately, but boy i will tell you, [indiscernible] >> i would like to pull you into the conversation at this point, doug. the treasury, the combination between sequestration and more

revenue, they had expected to borrow $100 billion. be going to deficit reduction? is the sequestration actually working from that point of view? >> $35 billion down, $17 billion to go. [laughter] running af we were budget, we would be proud. there were be months where you would put these things up. and then there would be months with big outflows to contractors and the like. reality is that we cannot fix this problem on the tax side. any clear eyed analyst who has ever looked at the future of the federal budget, which has $7 billion in new deficits kelli it is a recipe for economic disaster. you have to move to the spending side. as we have seen fairly clearly,

even if you like sweet -- even if you like sequestration -- and you can dig a hole to try to find that person, there is no money there. the big money is in the health and retirement programs. agreed,y much sequestration is the wrong avenue to get to where we need to go. what is the solution? do we start with corporate tax reform here? >> i think that there is a clear and compelling need for the u.s. to move to a tax system that it can be proud of, that can generate growth. wingdea of a raving right person is that they have become the most anti-tax if they can identify. we have the highest tax rate in the developed world. we have a tax rate that relies on methods of taxation that all of our competitors have abandoned.

the have focused on the borders, we have clung to a system that is outdated. as a result we could see more international competitiveness growing more rapidly. i if we have a recession, we are not going to solve them. we should start with a low rate is revenue neutraleform is in terms of closing the loopholes, or can we get some revenue from corporate america to help with these you have to i think there can be a bipartisan guidelines. if it gets the rate down to something that looks like the norm, if it brings it into the serioustury, if it is the international gaming

of the tax law and there are you cando that, i think get a bipartisan reform of that type. bipartisan. to be that is the place where we could get to yes. >> i am going to ask our business leaders, most in their palo you as a business owner that your tax rate stayed the same or lower going forward big, grand bargain? >> we do business to make a profit, so i hope the focuses on growing our -- there is still a lot of discussion about the corporate tax rate, that nobody plate -- nobody pays, by the way. may 2010, 1914 dollarsn

to make it sove got that businesses understand what the rules are, we are all going to play by the same set of rules, and it won't be so overly complicated. ist our government has done create a tax policy to incentivize growth and social change. if allowed to grow our economy, or tax system should be geared towards job generating activities, and also we need to get our money back from all over the planet. leaveations like apple their money because they are going to be taxed when they bring it back here. we should encourage them to bring it back. >> even though the stock market is booming, you think it is the tax code that is keeping the businesses from hiring? >> it is also that we do need to do something on the spending side. the federal government's deficit is unsustainable.

there's not enough discussion about how we cut the spending side other than these typical areas, but no one wants to touch entitlement reform, which has to be done. social security was never intended for a life expectancy of americans to be over 80 years old, the typical life expectancy of americans. it was created when the life expectancy of american men was under 70 years old. we need reform and other entitlements. to freely in able vestar capital in the economy, understanding what the tax rules ourgoing to be long term, government is making tax policies ait goes along. we cannot run our companies are do business like that. we need a lot more certainty and knowing what the rules are, and then we will figure it out. >> it is it really a matter of certainty and clarification with the tax code, or do you

want something more from this overhaul? >> i am just happy to be sitting with three people that i agree with. [laughter] i think one line of reforms need -- why do corporations reform themselves? it is usually because things have changed. the dynamic world, to remain competitive, you have to almost been a constant search for doing something better. when you look at the corporate tax codes in the u.s., it is a system of winners and losers, and also it is not transparent. experts to try to figure out how to optimize your tax position as a corporation. it creates all kind of dislocation. from my perspective, i companies effective tax rate globally is 30%.

classifiedof those losers in the service industry. i start by questioning -- considering that the majority of the u.s. economy is service based, why is all the incentive is asian outside the service arena? -- what is all the incentiv ization outside the service arena? wasindebtedness issue that mentioned earlier is a significant issue. it is one thing to borrow money to invest, and to invest for the future of whether it is a company or a country, but largely by borrowing is to service the debt. the debt pautho debt paula so lt is only going to continue. if you do the math brown any kind of interest-rate change -- around any kind of interest rate

change over the last 25 years, -- won a huge amount of the areas my company is involved in its actuarial work around pensions. waiting torain wreck happen and is going to happen 20 years from now. it is only a question of whether the will exists to tackle things like corporate tax reform as a way to get the country's house in order. >> how we get there? there was a bloomberg study that shows that for every percentage point reduction in the tax rate, we actually have to close $125 billion over 10 years in loopholes and deductions. where do we start? what loopholes and reductions are you willing to accept as representatives of the manufacturing industry? it is a conflict between the corporate sector.

with firstyou start vault education and honest conversation. it is important for people to the income taxes more than just a check sent in by this company and this company. it is a factor in our economic importance. is paid by real people and is increasingly paid by workers who are seeing the best american jobs, the ones that had the benefits and high wages, become scarcer. if not go to other places, disappear. but cannot afford that. we need to be honest that our tax code is one of the reasons that when anheuser-busch merged, it is not in st. louis. we lose the contributions of those corporations to the social infrastructure. be honest about this. yes, it is a way to raise

revenue, but let's do it intelligently. my favorite keep statistics on this is that the income tax turn 100 years old on february 3 this year. have had100 years, we less than an handful of real comprehensive reforms. it is hard, because we are going to ask every company on this panel and in america to recognize that don't get everything out this. there will be pieces they lose, but collectively, we can be made better off. what kind of leadership do you have? i think we have seen the house of representatives and the taxte take serious steps at reform. we should applaud the efforts of dave camp and max baucus for trying to get this done. the last piece will be in the many things the president has to consider, priorities. where we put this?

that is what we are waiting for. it sounds more complicated than it really is. we are the only country in the g8 that does not have a territorial tax system. when you look at the u.s. multinationals global competitiveness versus its global competitors, you have to start by the basis of the global competitor will likely pay a lower rate. the, that of the day is out of our control. on the other hand, that foreign company also has a more free use of cash. they can move cash from their locations anywhere in the world back to their headquarters for reinvestment. in the u.s., you cannot do that. what most american multinationals do? they leave their money outside

the united states. $1.50st that i saw was trillion of trapped cash. what does that mean in practice? we are company with $2 billion of cash on our balance sheet, 1 billion in the united states and $1 billion outside the united states. we have scoured the world to invest that billion dollars outside the united states. there are few scenarios were would be looking at we have to pull that back to the united states, because we would immediately suffer a tax loss to our shareholders. we would make efforts to spend that money globally. joining the rest of the world in some sort of territorial system is really apart from what should the rate be. that is a different conversation. but it is hard to keep outside the way multinational's against each other because it almost ties one hand behind our

back. >> earnings abroad is a huge factor in the corporate tax overhaul. you started with the territorial move. it is a benefit to the corporate sector. they can invest globally without bringing it back to the united states and maybe without that they being used to pay down deficit or create jobs. >> the taxes have to be fair as well. with 50 multinational different countries coming to pick a country and you say, maybe the u.s. multinational started that operation 50 or 75 years ago, but now is 100% staff with local people and 100% of their businesses indigenous. is a tax owed to the u.s. authorities on that business, or is that an unfair tax because the u.s. has nothing to do with

the value creation in malaysia. there is a fairness element. have said that territorial taxes come in all flavors. i assume you think there is a compromise their between ending the deferral and moving to a system where all earnings are taxed at the local rate. territorialhe system is a practical reality and we simply cannot stay out of step with our competitors and expect to cross them into the 21st century. within that there are all sorts of details about how you allocate revenues and expenses in two different bundles inside and outside the united states. i will not destroy the panel by going there, but they are important. for the integrity of the tax

code, for people to believe that there corp. is on a level playing field with others in the united states, they have to keep the territorial system from turning into a casino where you pull out a lucky draw. that is a detail, a very important one and one that i would expect if we get real momentum on this topic will become the focus of a lot of what goes on on the hill. >> in terms of the territorial tax and how to invest earnings globally, this is something you do in the course of business. what are the obstacles of doing that under the present tax? >> i think working our companies to keep the money they earn overseas overseas because of the reality of it being taxed if brought back here, is a lose- lose situation. none of that money is getting invested in the u.s. now and the

u.s. treasury's not getting a dime of taxes from it. the best solution is to eliminate it altogether and allow corporations to bring it back to this country so that they can invest that money and scourer the united states to look to reinvest that capital in job generating activities, in real estate, other things like that. when we talk about tax reform, we've got to look at domestically, some of the burdens and unfairness of the system. take my business, for example. a large amount of our capital for real estate development -- we do large-scale development. ordinarily we get an investment from private equity. negotiated manager the deal with us on behalf of investors, invest in our development, and let's a development makes $200 million and our company gets $100 million. the investor gets another $100

million. the manager gets what is called a carried interest. they get $20 million. at the capital gains level. our company that is out here doing all the work taking the greatest financial risk, we get taxed at the highest tax rate. that is an imbalance and that is an example of why we need to be a broader, comprehensive tax reform, because you have of job generating business taking financial risk, being penalized, compared to someone who is simply allocating on behalf of capital investors, risking no money of their own and doing no work other than oversight, and yet they are getting capital gains treatment. there is an example as to why there needs to be greater full taxn terms of reform. corporate tax reform, we need to engage in across-the-board.

and we have to go back to how we spend our money. >> private equity as part of that non corporate sector that you do business with a lot in your dealings. should we have a different tax code were different tax reform for the non corporate sector, the sole proprietorships, partnerships, the private equity that provide capital for small business owners? or should we treat business is the same period a dollar is a dollar -- should we treat same?sses the >> i would say simplicity in transparency is always the best way when you are tackling reforms. if is the first level of corporate to corporate tax reform in the last 25 years, that means it will probably have to last another 25 years. we might as well try to make it as clear and less opaque as

possible. taking dawns. companies in the real economy creating value, it really doesn't make sense -- taking don's point. >> i do want to emphasize what don just said about the spending side. one of the lessons of 1986, the last time i try to do a big tax reform, it did not last very long. back then we were worried about deficits, and we failed to control the spending side. in the search for revenue and deficit reduction, the tax reform unwound. if you believe in tax reform, as i do, the way you keep it is to be serious about spending. the second point about differential taxes, we already

have very different tax codes. we just raised the, break on the individual side. every partnership, every sole proprietorship, they'll have higher marginal tax rates. intellectually clean tax reform, when you draw on a blackboard, recognizes we have -- a small businesses comprehensive scheme is something that runs into the political reality of the moment. north,sident just went when that reform requires going south. what are the chances of getting that to the finish line? as a handicapper, i would have to say corporate only reform looks better at the moment simply because of that. >> we will circle back to handicapping, but there is so much agreement, i will have to voice some disagreement. in represent manufacturers

the industry. what are some of the deductions that you think your industry can do without in order for the greater grand bargain of corporate tax overhaul? [laughter] >> from a manufacturing standpoint, we want to make sure that those -- a system that is transparent. small companies make up a lot of our industry, so is not just a great big brand names. i would also say that we do need to incentivize a global system with the right behavior. that does go to one area that we think is almost universal agreement that we should make permanent and keep, and that is the tax credit for research and

development. when you look around the globe, you see almost all of the major countries that are coming along of very much incentivizing research and development. right now we go lurching from year to year never knowing whether there is going to be a tax credit or not. from a manufacturing thedpoint, the u.s. has -- is worldwide. we need to think in terms of those global factors. contributed a positive contribution to our balance trade of close to $60 billion. if we keep up with the system that as everyone here is pointing out really is not competitive globally, that is not going to perpetuate itself. that is crazy.

>> one of the other areas, corporate tax reform, and i don't like to get into specifics, but this is a good example. the big topic of the day is cutting deductions for corporate jets. any kind of new corporate tax reform eliminates corporate debt. the irony is, who we think makes these planes, who puts the ,assin, -- who puts the gas in who repairs them? it is like by not repatriating our dollars, the corporations are leaving your billion dollars out of the country so you can invest it there in research and development as well. that is about real reform. we need to look at what these deductions -- do want to incentivize continuing to be on a positive trade with aerospace

because we build some of the greatest airplanes and aviation products in the world? or do we want to now give that to another country? that is what happens when you start making less of a demand for the products here. so the tax policy does create manufacturing jobs. if we start tinkering with corporate back project tax deductions to much to the extreme -- with corporate tax .eductions if we eliminate the charitable deductions, what does that do to aids research, what is it due to cancer research and the like? we talked about dollars and since, but everyone of these decisions has a human consequence. that is what we have to remember. human beings make airplanes. gulfstream manufactures corporate jets to sell to all

the world and u.s. businesses and wealthy individuals. do want to continue to have them lose jobs because we cannot have a tax policy that compensates more investment? >> i think you articulate that perfectly. yet we still have to make those hard decisions. let's take the manufacturing example. it seems to be considered in the white house and has been stated that it is pretty much a protected industry. should we have the same rate regardless of industry? should professional services paid for the subsidy that is given to the manufacturer? >> the governor in his discussion looked at the audience and said we are broke. if you come into a corporation and you've got that same situation where something like 20 of the last 25 years, your expenses exceed your revenue. you basically say we are busted

and have to completely do this. the way you would start as from zero. you have zero basic budget. there would be nothing that carries over. it is all starting from scratch. then is building slowly. you have a nice to have and then you have need to have. from zero based budgeting. if you start from, we have all of these things and have to figure out how to whittle down, we will be talking for the next 50 years. indebtednessss the issue as much. i have three daughters. my sense is i should just go on and apologize. no civilization is in the process of passing on more burden to those who come after them than ours. >> you have been very instrumental politically as part of obama's team for reelection

and you have done some work with congressional leadership. what is the obstacle? it seems like there's a lot of consensus on this panel and in corporate america. there is some consensus in washington that this should be done. what is the problem? >> i think the big problem is that we have parties on both sides that don't want to give enough of things that are precious to them. the democrats are unwilling to look the country in the eye and make real reforms, real entitlement reforms. and the republicans on the other hand are unwilling to acknowledge that we are a society that does need to protect and preserve those who cannot help themselves. so you have that process. the president has shown a willingness to make some tough decisions on the entitlement side. i think he can go further. i believe he is most likely

waiting to see some greater progress on the other side, but ultimately, the challenge is that there is not the will. with itthe one plus seacrest asian -- with the sequestration problem. ultimately that is what is going to happen. we are going to have some unemployed politicians and they are going to suffer the consequences. maybe it will get the rest of the surviving ones back to the table. short of something like that, we are never going to see it. it reminds me of that movie with eddie murphy, "the distinguished gentleman." the congressman with the same name is kem died, so he ran a campaign with no picture but the same name. he was befriended by lobbyist and never playing golf. the lobbyist questioned him,

where you stand on tort reform? eddie murphy says, where should i be? and the lobbyist says, well, if havere for tort reform, i the doctors and the american medical association. if you are against reform, i got the trial lawyers. a. murphy said, how does anything ever get done here? drexel lobbyists said, nothing ever does. said, nothingst ever does. 20 years ago, treasury played a role. it took the lead, not only in getting the conversation going with corporations and congress and dialogue between the white house and different interest groups, it actually lead academically, providing footprints and data and research. the current -- is the current treasury equipped to do the same? we know that some of the

positions in the treasurer have not been filled, or took a long time to fill. they have yet to put out a tax draft in the last several years. are they quick to do so? >> i have little doubt that they are equipped to do so, but i would love to see them demonstrate it. i do think that have been missing in action to long. it is part of the education necessary t get tax reform done. if you look back at that episode, the education began probably 10 years before we started ont -- it both sides of the aisle and got serious with the treasury in 1984. they put out a beautiful, christine, academically perfect , politically unassailable draft. -- a beautiful, pristine draft. thing tod be a good

see right now. i think have the capability. we just have not had the chance to look at it. >> we are fortunate to have john rogers. will you give us our first audience question? >> i would be happy to. thank you. i question is related to the capital structure of firms, dividendstax code -- are paid twice. what that does in terms of distortion of the companies balance sheet, incentive to borrow rather than to raise equity. the have thoughts on that? do you have thoughts on that? getting taxed three ways, a could you are taxed when you die, too. or barring as opposed to distributing

dividends and have the attacks began. more often now we look at the stock market today, me as an investor in it, we see that we are looking at growth in the stock itself, and that is how we get our compensation as opposed to the role that stocks and equities had in our economy dating back 50 years, were was much more driven toward dividend. a very strong national gaming company became a reit just so they could not pay corporate taxes and dished to be to their investors and their shareholders. i think we are going to see more companies that have the ability to do that. then a service provider or manufacturer has a much more difficult time to do that. >> you have different types of

investors, and certain types of investors are growth investors. they would be more supportive of borrowing money for further investment in a corporation. many income investors that are looking for not necessarily capital appreciation, but in come on what they give to you as a fiduciary. you have to do both, and figure out what group of investors are you serving. there has been a fair amount of research that investors have done which show over long periods of time, dividends are essentially the only thing they can bank on. i have heard that discussion several times with certification investors, that growth comes and goes and it is not as easy as it looks, but what a company delivers back to its investors

is sacrosanct. it creates significant value over time. questions from our audience submitted. let me put this out to our panel here. on corporate tax reform, it is impossible to pick and choose among tax preferences. one not simply hair cut all preferences by a fixed percentage that grows over time? is that something that might be palatable to the corporate community? >> it sounds a lot like the sequester to meet. >> here is a way to think about it. if the tax rate is zero, the fight goes away. who cares what the preferences are? what you ought to think abt when you do corporate reform is, get it revenue neutral, and see how low you can drive that

rate. every time you get it down, the fight over the preferences become smaller. i leave it to the masterminds in the house and senate as to openly how they do that. when you get the rates down, it improves our competitiveness. lots the rate that drives a of the tax base behavior's. realistically get that rate so low that the companies right now that are paying an effective rate that is below that -- [laughter] why don't see any reason you cannot get the rate to 25%. it does not mean you throw away the tax credit, which we do need

and should be permanent. that is a doable task. when she said there is a line, what we are going to have tax everyone wantsn to be defined as not a tax preference. >> i would say that the biggest challenge with tax reform is when you lower the rate, you will be lifting some people up because they will be paying higher taxes. start payingg to more. what impact does that have on the economy as well? you have to look at that consequence as well. anything that is not the early brought out is a point of exercise, there are too many minefields that would do damage to the economy. >> if the business community cannot agree on corporate tax reform and the framing of

canorate tax reform, congress and the administration ever do it? >> if they can sit down and look at what the neck -- economic consequences are and have control over how the money is spent. when i run my business and we are looking at revenue, we are looking at spending and how much it is going to cost. and i get to control all of it. if business could sit down with all the same resources that are congress and our president have, we could make a deal and work it out a lot quicker than the gentleman down on the hill. >> i would like to end with one question. , do youping the debate think that the corporate tax reform, the overhaul, will come in the next two years?

is the probability of that above or below 50%, given the unique time we have in our history right now, given that we have some agreement in congress and we have chairmen in the house and senate urgently want to therm the corporate tax, is possibility of that occurring above or below 50%? cracks slightly above 50%. >>, slightly above 50%. >> slightly below. >> we have tremendous pressures right now and a lot of unanimity in the business community. >> fantastic, thank you all very much. i really appreciate it. [applause] >> i want to say a special thank you to all of you for sticking with us through the course of the day. we have had an interesting day, covered a lot of ground on a

whole host of topics. we had some experts on the fed talk to us about who ben bernanke's successor might be this morning. we had a lot of talks about the deficit. we had the chairman of the ftc talk about the big case involving net neutrality. chairman give a on dodd-frank, and then the chairman of the cftc called for a paradigm shift. we have heard from two republican governors of stake facing different challenges and heard about what they are up to, and as well we have heard a lot about the economy. the president's chief economist earlier today taking a not so omble shot at former

director david stockton. at the end of the day we have had not only some agreement on corporate tax reform, we have had an 80 murphy movie reference. you don't get those very often. a special thank you to our for allowing us to have this event here. i want to thank our colleagues at bloomberg for the editorial help with everything that played out today. this reminder for those who showed up this afternoon, bloomberg linc holds over 30 summits like these up around the world. the bloomberg hedge fund summit june for the new york, and the one we should all be looking for, the bloomberg next big thing summit on june 17-18. bloomberglink.com.

again, we appreciate everyone's digging it out here, your thoughts, your questions. the good news is we have a reception for you right outside the door here. thanks for participating. we will see outside and we will see you at the next bluebird washington summit. thank you. -- bloomberg washington summit. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> you can see all of today's coverage online at c-span.org. also in washington today, president obama held a news conference on the 100th day of his second term in office. he said there would be no rush to judgment and u.s. involvement

in syria, following intelligence reports of chemical weapons in use. he said he was proud of jason collins, the nba player who came out yesterday as gay. after the president's press conference this morning, word from the white house about an appointment to the fcc. saying that president obama as theo name tom wheeler country's top telecommunications regulator. that announcement is expected wednesday, according to the associated press. coming up this evening, supreme court justice clarence thomas earlier this month spoke with law students at duquesne law school in pittsburg. i never called myself conservative. that was another put down in the 1980's when they started naming

us black conservatives to show that we were sort of like some vile thing that occurred. but we did not call ourselves anything. we were just people trying to think about very difficult things and offer a point of view. suddenly there was a prescribed point of view. i found that fascinating, that people were told that they could only go to one neighborhood or these schools, that is wrong. but then it is ok to tell people to only think certain things. it is bizarre. but at any rate, i was never politically involved. i don't like politics. things.about i think about philosophies or ideology or things that happen in society. i like politics. i don't know i can tell some somebody things that are obviously wrong and expect them to believe it. [applause]

i certainly was not republican when i came to d.c. i became a republican to vote for ronald reagan. i was a registered independent. that was about it. was fromt 18 because i georgia. in 1968 andhumphrey mcgovern in 1972. and i thought they were too conservative. [laughter] to thinkgain, trying things through. i was more of a libertarian. i was trying to figure things out, but people were telling me that you are black, you already have the views you are supposed to have. you are not suppose to read ayn rand. you are not supposed to think about things. so what we go to school? thinkm i supposed to

today? prexy his remarks in their entirety tonight on c-span at 9:00 p.m. eastern. >> we do know that eliza was an invalid when she got to the white house. people think that she did not participate much, and that is not exactly true. she was very, very involved. stayed in her own bedroom upstairs, right across from the president's office. she was always able to hear what was going on. she brought different points of view to the president and was able to calm him down. she was the grandmother of a house, as well as taking care of her daughters and her grandchildren. >> tune in monday for our next program on first lady julia grant. >> the general martin dempsey

said the u.s. military would be prepared to implement a no-fly zone in syria, but said it is not clear to him what the outcome would be. he was introduced by the washington bureau chief of the christian science monitor. >> i am dave cook from the monitor. general martin dempsey. this is his first visit with our group and we are grateful to him for making time in his busy schedule. ingraduated from west point 1974, and since then has served his country and a wide range of places and positions. early in his career he was an english professor at west point. more recently his assignments have included being commander of the first armored division in baghdad, deputy commander and then acting commander of u.s. central command, an army chief of staff. general dempsey and his wife

have three grown children, all of whom served in the u.s. army. please, no live blogging or tweaking, no filing of any kind while the lunches under way. there is no embargo when the lunch is over except that c-span has agreed not to use video of the session for one hour after the lunch in, in order to give those of us in the lunchroom chance to file. we will start by offering our guest the opportunity to make some opening comments and then move to questions around the table. >> first of like to thank you for your service, and some of

you may know that from 1969- 1971, they've worked on ballistic missile defense, of all things. you also have two sons currently serving, and we thank them for their service. this day in history, in 18 03, the louisiana purchase, so kind of the opposite of sequestration. we will glance off that, and just let me tell you briefly about my recent trip, because there is always some trip that i would describe as recent. i am back three days now from my fourth trip to the asia-pacific, and my first visit to china. it started in seoul, went to beijing, ended up in tokyo. trip withd it as a the theme of assurance, starting

and ending with our allies in seoul and tokyo. assuring them of our continued commitment, and then stopping in beijing to assure them as well that we will continue to work toward a commitment that the heads of state made to find a new relationship. we have not actually agree on the definition of a new relationship. you will hear all kinds of phrases used. i did not get into the taxonomy of the whole thing. i simply said yes, we think it is an opportunity to forge a new, more positive relationship, but it has to be done in the context of our existing relationships, not as a blank sheet of paper, if you will. i think the message resonated. i came back committed to doing our part, although this will be

clearly beyond just the military instrument. i got off the plane and we have the other issues that are lingering, whether they are mideast or budgetary issues. we are trying to sort all that out. trip andvery useful one that i found to be kind of encouraging. with that, and with full recognition that when i come to lunches, i don't actually eat lunch, i admire land. i would be happy to take your questions. >> we had senator mccain last thatday and he was arguing our priorities art upside down on how we are going to take care of airline passengers and what we don't take care of our national security. that there was a danger

that we would not be keeping good and qualified and talented young men and women in the military who are all considering getting out because they see no future, at least a predictable future, which is the least we owe them. how would you assess the impact of the sequester on military morale and retention of the best and brightest? >> that is the other reason i travel, is to get out of washington and to go visit soldiers, airmen, marines, and coast guard. trip, besidecular the senior leaders in seoul and tokyo, i met with military members serving there. i also stockton alaska and did a .own hall meeting -- also stopped in alaska both coming and going and did a town hall meeting.

it is on everyone's mind. i found that disappointing, frankly. you want to go and hear about their issues related to their service in wherever they happen to be serving, yet what we hear most often is their concerns about their future -- you know, the potential for a future career in the military. for example, if you are a pilot and you come into the air ports of -- into the air force to fly. if you are not flying, there is a level of dissatisfaction in that. we have a current readiness tollenge, because in order observe the fy 13 sequestration target in the last six months of the year, we have had to go where you can sweep up the money. generally speaking, that tends

to be in readiness and training. i won't bore you with the budget details, you'll just have to take my word for that, but we are in the business this year of finding the money wherever we can find it. that generally draws you to the readiness accounts. so we have our readiness challenge, which is not to say we are not fulfilling our obligations globally today, but in order to do that, we are advantaging those organizations that are either in deployed or about two deployed. everybody else is not training or not maintaining. that's of course is the challenge we will have to overcome. the final point on that, today's greatest challenges could indeed become tomorrow's retention challenges. they are not there yet, but again, if we bring these young men and women who have been

operating in such a significant pace with significant responsibilities and feeling as though they are making significant contributions, and we bring them back and sit them, i predict that will lead to a retention problem. >> i was struck by a quote from you were you said we have been living with unconstrained resources for 10 years, and frankly we have developed a bad habit that we are seeking to overcome. did you think that observation does more broadly about the dangers beyond his personal conduct? >> absolutely. it is not just a cliche to say that when you have all the resources you need, you know longer have the responsibility to think. we are trying to think our way

through this challenge, and i think we will find opportunities to maintain our level of effectiveness of becoming more efficient. . toog that towel out tightly. -- you cannot wring that towel out too tightly. we were asked to find four hundred $87 billion in the budget control act. is a point at which you just cannot do that by being more efficient. 's --el of secretary we are trying to find that now. use that chemical weapons to

find game changer as rethinking chemical weapons available to us. give us your take on that. >> i did not see the press conference. i was actually in a budget meeting, believe it or not, so i cannot speak exactly the what the president said. nothing i have heard in the last week or so has changed anything about the actions we are taking in the military. we have been planning and developing options. we are looking to determine whether these options remain valid as conditions change. that does not mean that what we have heard over the last week would not change the policy calculus, both in this capital and in others.

but militarily, our task has been to continue to plant, to continue to engage with partners in the region and to continue to refine options so that if we are asked to implement any of them, we will be ready to do that. in the wall street journal yesterday, you are quoted as saying in white house meetings that once a year constrained was syrians air defenses which came from russia. can you comment on how constrained both air defenses are for you? >> i am not sure i said constrained. i may have, but the point i was trying to make, there were people comparing our actions in libya to what could potentially occur in syria. thes making the point that

air defense picture in libya was dramatically different than it is in syria. in syria i think you have five times more air defense systems, some of which are high end air defense systems, higher altitude, longer rage. -- longer range. they are collapsed into the western one-third of the country. it is a much denser and more sophisticated system. the u.s. military has the capability to defeat that system, but it would be a greater challenge, take longer, and require more resources. >> fy14 has been called a straight line projection from fy 13. why did the pentagon ought not to make some of the hard choices

and do you request, expect to send an extensive amended request to the hill? >> as to why the budget went in without acknowledging the budget control act caps of sequestration, having been a service chief, i can tell you that the act of preparing a comprehensive, complicated, and tedious. sequestration really did not get signed into law until the first of march, meaning when the deal was not made and the continuing resolution came due, that is when it became real. it would be literally impossible for us to have done -- we would've had to do two budgets, and that is not possible when you are talking about furloughs.

the same people you are asking to do budgets generally are subject to furloughs. it was not of neglect, it was a practical matter, literally what was possible for us to ask the services to do. to your follow-on question, where we now have to submit an alternate budget, that decision has not been made. it will not be mine to be made, but i know that the decision has not been made. if we think about it pragmatically, especially now with the news that the deficit .reached is now being delayed as you know, we thought that was going to occur in july it would provide some forcing function for additional budget negotiations. that has not been swept to the right. it does not appear that what we are living with out into the fall. there are two choices.

we could submit another budget, or if we don't, we will have to enter into some negotiation with congress on how to of the door of those cuts. >> general, there that has been a lot of talk in this town recently about throwing up a no-fly zone. and without reference to any specific country in the middle east, could you talk a little bit about what goes into an operation like that? i think there is a notion around that it is pretty simple and easy, but what i know of it, it may be a little more complicated. could you talk about that? >> well, no-fly zones -- well, actually any military operation tends to be more complicated than generally gets talked about in open sources because there are the things that have to occur. secondly, they tend to be more risky. and the third thing i would

mention is we are kind of the victims of our own success. we have made the very difficult look very manageable for a very long time. so we do have to be a bit cautious about that. but to be effective, a no-fly zone would have to have several elements. you would have to knock down some of the integrated air defense system of an adversary. although steth technology exists, to have a no-fly zone, you simply don't penetrate it. you have to control it. at some point you would have to